Recommended House Flipping Insurance Companies
National Real Estate Insurance Group
Get Quote
Overview
We've all heard the horror stories. The house that was two weeks from being finished when a fire broke out. The brand-new kitchen that was completely destroyed by a burst pipe. The contractor who fell off a ladder and is now threatening to sue. It's enough to make even the most seasoned real estate investor break into a cold sweat. When we first started flipping houses, we thought our regular homeowner's insurance would cover us. We had it for our primary residence, so why wouldn't it work for a property we owned? We quickly learned that a traditional policy is about as useful as a screen door on a submarine when it comes to the unique risks of flipping.
This article isn't about scaring you into buying insurance. It's about empowering you with the knowledge to protect your hard-earned investment. We're going to walk you through the types of insurance you actually need, what they cover, and why a typical policy just won't cut it. Plus, we'll talk about how to get the best value and where to find the right providers. And of course, we'll show you how FlipperForce can help you keep all your important project documents and contacts in one place, so you're always prepared.
Key Takeaways
Flipping houses requires three types of insurance that a standard homeowner's policy will not provide: a dwelling policy for the vacant structure, a builder's risk rider for the renovation work and materials, and a general liability umbrella to protect you from injury claims and lawsuits. On an average-priced flip, expect to pay roughly $190 to $375 per month for a dwelling policy with builder's risk, plus a few hundred dollars a year for $1 million in liability coverage.
- Standard homeowner's insurance will not cover a flip. Insurers treat vacant, under-renovation properties as high-risk, so you need specialized coverage.
- You need three policies: a Dwelling Policy for the structure, a Builder's Risk rider for the renovation and materials, and a General Liability Umbrella for injury and lawsuits.
- Choose Special Form coverage over Basic Form, and Replacement Cost Value over Actual Cash Value. The cheaper options leave dangerous gaps.
- Budget roughly $190 to $375 per month for a dwelling policy with builder's risk on a $375,000 property, plus a few hundred dollars a year for $1 million in liability.
- Get quotes the moment you are under contract, so coverage is in place the day you take possession.
- Use an investor-focused insurer, not your personal auto and home provider.
This article does not constitute insurance, legal or investment advice. This article was created for informational and educational purposes only to provide general information on the available insurance options that could be utilized for your properties. We recommend consulting with professional, licensed insurance companies to ensure you have the appropriate coverage for your properties.
FAQ
Do I really need insurance for my house flip? I'm only going to own it for a few months
That's a question we get all the time, and the short answer is a definitive yes.
Buying insurance isn't just a cost, it's an investment in your financial security. A house flip is a business, and like any business, it has risks. Your project could be weeks from completion when an unforeseen disaster wipes out your profit in an instant. The house could catch fire, a worker could fall off a ladder, or the property could be vandalized. Without the right insurance, you could be on the hook for all of it.
The Three Must-Have Insurance Policies for House Flippers
Flipping houses requires special insurance coverage that your traditional homeowner's policy will not provide. Why? Because house flippers typically buy distressed properties that need significant renovations and sit vacant for months while the work is being done. Traditional insurers view these vacant, under-renovation properties as high-risk, and their standard policies are not designed to protect them.
| Policy |
What it covers |
Why you need it |
| Dwelling Policy |
Direct physical damage to the vacant structure |
A homeowner's policy will not cover a vacant, non-owner-occupied property |
| Builder's Risk Rider |
The renovation work, plus materials and fixtures on site |
A dwelling policy alone may not cover materials or construction damage |
| General Liability Umbrella |
Bodily injury and property damage claims against you |
Protects your personal assets from costly lawsuits |
Dwelling Policy
Think of a Dwelling Policy as the foundation of your insurance plan. It provides coverage for direct, physical damage to the property itself, and flippers most often use it for a vacant building under renovation.
A dwelling policy is different from a standard homeowner's policy, and the distinction matters. A homeowner's policy is a package deal for a home you live in, built on the assumption that someone is there to deter thieves or notice a leaky pipe. For insurers, a vacant property is a higher risk: a target for arson, vandalism, and theft of valuable materials like copper plumbing. A dwelling policy is tailored for these non-owner-occupied properties, so it's essential that your agent understands your intentions and the scope of the renovation.
For insurers, a vacant property is considered a higher risk. It's a magnet for trouble, a target for arson, a spot for vandals, and a place for thieves to steal valuable materials like copper plumbing without being disturbed. A dwelling policy is specifically tailored for these non-owner-occupied properties, and it's essential that your insurance agent understands your intentions for the property and the scope of the renovation so they can assign the appropriate values for both the building and the renovation itself.
story time
We learned this the hard way on a flip years ago. We came in one morning to find the property had been broken into and all the new appliances we had just delivered were gone. It was a gut-punch, but our dwelling policy saved us from a financial loss.
Builder's Risk Policy "Rider"
A builder's risk policy covers a property while it's under construction or renovation. Think of it as a comprehensive shield for your project.
This coverage is crucial because a standard dwelling policy may not protect a property undergoing significant renovations. A dwelling policy typically covers the existing structure, but a builder's risk policy extends that protection to new construction materials, fixtures, and equipment on site, even before they're installed. If you have new cabinets and flooring delivered that are then destroyed by a fire or stolen, a builder's risk policy covers the cost. It also covers physical damage to the property during construction, like a storm collapsing part of the roof.
Because it's a specific type of coverage, it's often added as a rider to your dwelling policy so you're protected from the moment construction starts until the project is complete.
FAQ
My general contractor has insurance, so I'm covered, right?
Not necessarily. Your contractor's insurance typically covers them and their crew, but it may not protect your materials or the property itself.
A Builder's Risk policy is specifically designed to cover physical damage to the property during construction, including the materials, fixtures, and equipment you own that are waiting to be installed. We've seen a fire start in the middle of a kitchen remodel and destroy the new cabinets, appliances, and tools on site. A builder's risk policy would cover that.
General Liability Umbrella Policy
A General Liability Umbrella Policy protects your personal assets. It provides coverage for bodily injury or property damage that occurs on your property, shielding you from costly claims and lawsuits.
It's needed more often than you'd think. A delivery driver could slip and fall on ice, a curious neighbor could wander onto the property and get hurt, or a subcontractor could get injured and sue you even if they carry their own insurance.
This policy is your first line of defense. We recommend a minimum of a $1 million policy. It's surprisingly affordable and provides a critical layer of protection. Don't skip this.
FAQ
How Much Insurance Coverage Do I Need for My House Flip?
All insurance coverage isn't created equal, so it's worth thinking carefully about how much you need to avoid being under-insured or over-insured.
Two choices drive most of this: your coverage form and your settlement method.
- Basic Form Coverage
- Special Form Coverage
Basic Form Coverage
Basic Form covers only the causes of loss explicitly listed in the policy. Everything else is excluded. A basic policy might cover fire and wind but exclude theft or water damage from burst pipes. It can save you 25 to 30 percent, but the exclusions are a real risk. We once had a cold snap burst a pipe and flood an entire basement. On a basic form, that would have been out of pocket.
Special Form Coverage
Special Form is what we always recommend. It covers all causes of loss except those specifically excluded, which puts the burden on the insurer to prove a loss was excluded. Common exclusions to watch for are sewer and drain backup, earthquakes, sinkholes, floods, and intentional damage. You can often buy some of these back through endorsements.
- Actual Cash Value
- Replacement Cost Value
Actual Cash Value
Actual cash value coverage settles claims based upon the property's value in it's current condition. Actual Cash Value is calculated by taking today's replacement value and deducting depreciation to account for the property's age and wear-and-tear.
Actual cash value leaves you in a tough position because you may not be able to recoup all of your money that you would need to completely re-build the property.
Replacement Cost Value
This is what you want. RCV pays out the amount it would take to rebuild or replace the damaged property with a similar one in today's market. It's the only way to truly protect your investment and ensure you can complete the rehab after a total loss.
At a minimum, you should have enough insurance coverage to cover the amount you paid for the home (less the lot value) and the amount invested in the property for renovations.
However, in the event of a total loss where you lose the entire structure you will either have to completely re-build the property at full replacement cost or sell off the lot to another investor for them to re-build.
In that scenario, you will want to have enough coverage to pay for the replacement of the property or enough coverage to prevent a loss if you have to liquidate the lot.
FAQ
How Much Should House Flipping Insurance Cost?
House flipping insurance costs more than a standard homeowner's policy, because it's a higher risk for the insurer. According to our partners at
Obie Insurance, house flipping insurance can run 15 to 25% more than a standard homeowner's policy.
Your actual cost depends on your location, the property value, the scope of the renovation, and your coverage level. Here's a rough guide:
| Coverage |
Typical cost |
| Dwelling policy + builder's risk rider |
~0.6% to 1.2% of property value per year |
| The same on a $375,000 property |
~$190 to $375 per month |
| General liability umbrella ($1 million) |
A few hundred dollars per year |
| Full annual house flipping policy |
~$2,000 to $5,000 per year on an average-priced property |
PRO TIP
On my house flips, a dwelling policy with a builder's risk rider has typically run about 0.6% to 1.2% of the property value per year. On a $375,000 property, that's roughly $190 to $375 per month. A general liability umbrella is quite affordable, often only a few hundred dollars a year for $1 million in coverage.
Finding the Right Insurance Provider
Just as you wouldn't use your family doctor for major surgery, you shouldn't use your personal auto and home insurer for a house flip. You need a company that specializes in insuring real estate investors.
These providers offer flexible coverage for vacant properties, renovation projects, and even occupied rentals if you decide to hold a property. If you're doing multiple flips a year, some can put all your properties on a single schedule with one monthly payment. We always get quotes from providers who understand the real estate investing world, because they're competitive on price and they know how to structure coverage for exactly this kind of project.
FAQ
Where do I even start looking for a company that specializes in this?
Thankfully, there are providers who understand the unique needs of a house flipping business. These companies offer flexible insurance solutions for vacant properties, renovation projects, and even occupied rentals if you decide to keep a property for a while. For investors who are doing multiple flips a year, some of these companies can even put all of your properties on a single schedule with one monthly payment, making your life a whole lot easier.
We have relationships with a number of insurance providers that specialize in real estate investor insurance. When we're flipping houses, we always get quotes from providers like Obie Insurance and National Real Estate Insurance Group (NREIG). They understand the real estate investing world and are set up to give you the exact coverage you need. We've found that they're not only competitive with their pricing, but they are also experts in this space, so they'll work with you to find a policy that fits your specific project.
Recommended Insurance Companies
National Real Estate Insurance Group
Get Quote
Don't Wait Until It's Too Late!
The last thing we'll tell you is this: Don't wait until the last minute to get a quote. The moment you get a property under contract, you should start shopping for insurance. You want to have a policy in place the moment you take possession. A fire, a burst pipe, or an accident can happen on day one, and you want to be protected from the start.
Frequently Asked Questions
What insurance do you need to flip a house?
You need three policies a standard homeowner's policy won't provide: a dwelling policy for the vacant structure, a builder's risk rider for the renovation and materials, and a general liability umbrella for injury and lawsuits. Together they protect the property, your materials, and your personal assets.
Why won't my homeowner's insurance cover a flip?
Homeowner's policies assume you live in the home and someone is there to prevent problems. A flip sits vacant and under renovation for months, which insurers consider high-risk, so a standard policy either excludes it or won't cover it at all.
How much does house flipping insurance cost?
A dwelling policy with a builder's risk rider typically runs about 0.6% to 1.2% of the property value per year, or roughly $190 to $375 per month on a $375,000 property. A $1 million liability umbrella is usually a few hundred dollars a year, and a full annual policy on an average-priced property generally lands between $2,000 and $5,000.
Does my contractor's insurance cover my flip?
Not fully. Your contractor's policy covers them and their crew, but usually not your materials or the property itself. A builder's risk policy covers physical damage to the property and the materials you own during construction.
When should I get insurance for my flip?
The moment you're under contract. You want the policy active the day you take possession, because a fire, burst pipe, or accident can happen on day one.
Do I need vacant property insurance or builder's risk?
Usually both, combined. The dwelling policy covers the vacant structure and the builder's risk rider extends that to the renovation and materials. Most investors carry them together so there's no gap between "vacant" and "under construction."
Conclusion
House flipping insurance is not an optional expense. It's a fundamental part of your business plan and a critical investment in your financial security. You've worked hard to find the right deal, secure financing, and plan your rehab. The last thing you want is for an unforeseen disaster to wipe out your profit or, worse, put your personal assets at risk.
By understanding the different types of policies, the coverage you need, and where to find the right providers, you can protect yourself and your business. The peace of mind that comes with knowing your investment is secure is invaluable. At FlipperForce, we believe that success in house flipping comes from being prepared and using the right tools.
