What sort of homeowners insurance do I get on a house that I buy to refurbish but not live in? Is cost high?
Saturday, January 24th, 2009 at
5:33 pm
dallas patent asked:
I am considering buying a house to flip, but I will put it an LLC. I need to find out if the insurance on the house will be reasonably priced. I won’t be living in the house but will be there almost daily.
I am considering buying a house to flip, but I will put it an LLC. I need to find out if the insurance on the house will be reasonably priced. I won’t be living in the house but will be there almost daily.
Tagged with: Homeowners Insurance • House Buy • Insurance
Filed under: Homeowners Insurance
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Yes it will be. All you need is minimal coverage
you will need to get a vacent policy untinl you move in or rent it out and it will be higher then your homes hopes this helps is there a mortgage on the house?
it’s called builder risk ins. I got mine through Nationwide Ins. Not very expensive
You would need a vacant dwelling policy or, depending on the severity of renovations, you may need a Course of Construction policy. Neither of these policies are cheap and offer limited coverage. However any other type of policy would be inappropriate, and if you tried to present the risk as anything else (i.e. a rented dwelling) to secure a better rate this would be considered misrepresentation. At that point your policy wouldn’t be worth the paper it’s written on.
You want a builder’s risk policy, and you should start shopping around immediately for quotes. Some companies are more expensive than others. They’ll want to know what type of renovations are taking place and how much they’ll cost as well. Plus they generally won’t cover any demo, and they won’t cover the work being down by and subcontractors so make sure anyone working on the home for you has liability insurance by asking them for a certificate of insurance.
If you’re not living in it, it’s not going to be a homeowners policy. It will cover the structure. If you’re doing more than cosmetic work, it’s a type of builder’s risk policy called an installation floater. If it’s just cosmetic, you can buy a vacant dwelling policy. You can’t add liability to an installation floater, but you can’t add building materials on premises to a vacant dwelling policy.
And just because you’re there every day, doesn’t mean it’s “owner occupied”. If you’re not LIVING there, it’s unoccupied, aka, vacant.
Insurance on a flip house is NOT going to be what you’re likely to think of as reasonable.
You need to sit down with your agent and discuss this in detail. If you’re going to be flipping houses regularly, you’re going to need a close relationship with an agent who can get things done for you.