House flipping TV shows make it look easy, when in reality, it’s much more than just a paint job and pretty countertops. Purchase price, rehab costs and projected market value are usually at the top of the list when starting a house flip project, but it’s crucial to make sure home insurance makes the cut, too. Many moving pieces go into a house flip, and it’s important to keep in mind the risk of what can happen during the process.
Below are answers to common home insurance questions for new house flippers.
What type of insurance policy do I need for my flip?
New house flippers may think general homeowner’s insurance will cover their needs but flipping houses requires a special type of insurance coverage that a normal homeowners insurance policy does not provide. The type of insurance policy needed for a flip depends on the stage of the project.
At SelectQuote, we can help determine the right policy for each stage of your flip.
Here are four policies to consider when taking on a house flipping project:
- Builder’s Risk Policy – A builder’s risk policy covers the property during construction. You’ll want to ensure all of the needed items—such as an installation floater for materials—are included in the policy. Once you complete construction, you’ll likely have;to secure another type of insurance.
- Dwelling Policy – A dwelling policy covers the home’s structure, but not the personal belongings inside.
- Liability Insurance – Liability coverage protects the owner and investors in the event an injury occurs at the property.
- Vacant Home Insurance – If the property will sit empty for 30-60 days, you’ll want to consider a vacant home insurance policy. Vacant homes pose a higher risk to theft, vandalism, fire and water damage. A standard homeowner’s insurance policy typically doesn’t include coverage during times of vacancy. If there are delays in the schedule or the house sits on the market empty for months instead of weeks, vacant home insurance provides an additional form of protection.
How much insurance coverage do I need?
In general, you’ll typically want to obtain enough coverage to cover the amount you paid for the home and the amount invested for the renovations.
When should I get insurance for my flip?
As soon as the property is under contract, you should start exploring your options for insurance. The easiest way to explore your options is to work with SelectQuote. In just minutes, we can compare coverage and prices of some of the most trusted carriers to find the right policy for your project.
Can I purchase one policy for multiple houses?
A policy covering multiple pieces of real estate can be especially appealing for investors looking to flip more than one home. This type of coverage does exist but may be harder to come by.
Ensuring proper insurance coverage at each stage of your house flip is key to protecting your investment. Let us do the work for you—in just minutes we can help you find the right amount of coverage for the phase of your flip at a price that works for your budget.
