What Insurance Do You Need to Flip Houses?
One of the most common ways to break into real estate investment in the US is to flip a house. If you don’t want the hassle of buying a home and renting it out to others, then buying a fixer-upper and selling it for more is the next best thing.
An often-overlooked aspect of rehabbing a rental property is obtaining the right insurance coverage. The new flipper usually seeks out the same insurance provider they use for their personal home and auto; however, flipping houses requires a different kind of insurance coverage than what is normally provided by a typical homeowners’ policy.
Why Do I Need Insurance for My House Flip Project?
Insurance protects you and your investment property against all kinds of perils and liabilities that might arise during the flip. The risks you might face include fires, vandalism to your property, and theft of pipes, fixtures and other items.
You can protect your property and assets with the help of an insurance policy while maintaining peace of mind.
What Type of Insurance Should I Purchase for My House Flip Project?
Flipping houses requires special insurance coverage that your traditional homeowner’s insurance policy will not cover. This is because a house being flipped is typically in need of significant renovation, and will sit vacant for months while the flip is being completed—this is considered high risk.
For this reason, when flipping houses you will need to consider 3 special types of insurance:
If you are planning to do a structural renovation, you might want to consider a Builder’s Risk policy that covers direct, physical damage to a property during the construction process. Materials and fixtures used in the renovation of the property may be covered if the insured owns them.
A General Liability policy may provide coverage for bodily injury that occurs on the premises, such as a slip and fall or wrongful death. This coverage does not extend to your general contractors or workers you hire to be on site.
Does your contractor have the correct insurance to work on your property? If not, they may need general contractor’s insurance. Luray Insurance offers this coverage beginning at $1,500 per year. We can put together insurance packages that include worker’s compensation, auto, business, and umbrella coverage.
When in doubt, call Luray Insurance of Baltimore at 416-602-2636, and let’s discuss your insurance needs so that we may craft a policy that will properly protect you, your property, and your assets. Make sure to visit our website or speak with us in person at our office.