RE Investors Insurance?

[ChrisNJ 0]

Okay, I'm really new at this. My question has to do with flipping houses and homeowners insurance.

 

Say you bought a fixer upper and plan on holding it for about 3 months. Do you get a standard homeowners policy for this house? Aren't those policies generally for 1 year. Won't the insurance company get mad if you cancel the policy after 3 months? Don't insurance companies have a problem writing policies for vacant houses? Are their companies that deal specifically "investor policies"? Do you know any websites for these companies?

 

I guess my question really is: How do I Cover My A$$ ? I don't want my investment going up in smoke!

 

Any input would be greatly appreciated.

 

Thanx

[MichaelC 160]

Chris, when you purchase a property with any kind of financing on it, you will be required to have an insurance policy in place before the deal goes through. Every lender will want their loan to you insured in the event something unforseen occurs. The bottom line is they need to know where their money is coming from should the property go down.

You will need to shop around for a policy that covers your needs. If you are talking about a vacant fixer, you need to make this clear to the insurer. A standard homeowner's policy generally will not cover this situation.

Your best bet is to shop around locally, rather than online. Establish a business relationship so that in the future you already know who to call and what to expect. You should ask other investors in your area who they recommend. Perhaps some members of a local REIG can assist you.

Finally, no, the insurance company will not be angry if you cancel after three months. They are in business to suit your needs, not vice versa. They received three months premiums from you, and the possibility of additional business in the future. They'll love you, Chris.

[Dave T 0]

If it is a fixer, ask for builder's risk insurance.

 

If it is vacant, being held for resale, ask for a landlord policy with a 60 day vacancy rider.