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Real Estate Investors Insurance: Critical Protection for House Flippers and Landlords


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When you buy a property to flip or rent, that home becomes a business investment. So, you must insure it appropriately. You can’t afford to lose money on the venture because something goes wrong.

With the appropriate balance of insurance options, you can protect your solvency in case of a mishap impacting the home. Your policy can help pay for damage costs, cleanup and other assistance. For help enrolling in the appropriate protection, contact Island Wide Insurance Agency. We’ll help you get covered.

Coverage for Investors

You might buy a property only to make small improvements and then rent it to a tenant. In other cases, you buy a home, completely gut it, remodel and then attempt to sell it at a profit. Depending on exactly how much work you plan to do on the property, the right project insurance might vary.

You often need:

  • Inland marine insurance: When you transport equipment, this coverage can apply to it during movement, storage offsite and at the work site. Coverage also often applies to the building materials you use while working.
  • Builder’s risk insurance: Many insurers use inland marine insurance and builder’s risk coverage interchangeably. They relate to each other closely. This coverage applies best to large-scale projects and remodels. For example, if you plan to gut the home, you’ll likely need this protection. If this is a long-term project, this policy might also apply.
  • Vacant remodel coverage: Short-term projects on a smaller scale generally benefit from this type of coverage. You won’t live in the home, but you will make improvements before planning to sell or occupy it. A home that you plan to improve and then rent might need this coverage.

What’s in Coverage?

With builder’s risk and vacant remodel policies, you will have help covering costs related to repairs and replacements for damage occurring during the remodeling project. Coverage might include:

  • Structure Coverage: Policies will pay for most of the items used to construct the home.
  • Fixtures Insurance: Coverage can apply to fixtures already installed in the home. It can also cover items not yet installed in the structure.
  • Equipment Breakdown Coverage: Damage or losses of construction equipment might put a project behind schedule, or even cause it to fall through. This coverage might help you repay for repairs or replacement items.

Often, the value of the property, the assets involved, and the project’s timeline help you determine which policy you need. Your policy must effectively address the value of the property upon purchase, as well as the value of any improvements made. You can often set policies to last from as little as 30 days to upwards of one year.

Additional Policy Items

Keep in mind, you might need more than just builder’s risk coverage on your project. You might need to buy supplementary policies depending on where you work, what materials you use and other factors.

These might include:

  • Commercial General Liability Protection:  Your actions might cause harm to third parties or their personal property. This coverage can protect you and your operation in case you must compensate those parties for their losses.
  • Umbrella liability insurance: This high-value coverage can insure damage costs that exceed the value of your existing liability policies.
  • Workers’ compensation: If you have employees, you often must provide workers’ compensation. Coverage might help you repay them if they get hurt or sick on the job. Many states require these policies even if you only hire part-time workers.
  • Commercial auto insurance: Using your vehicle officially for business might warrant your carrying commercial auto policies. Standard auto coverage likely won’t cover you in a commercial capacity.

Landlord Coverage

You might flip a home to use as a rental property. However, you will maintain ownership of the home. You must insure your own interest in the property. This coverage is separate from most inland marine and builder’s risk policies.

Some of your coverage options might include:

  • Dwelling Coverage: This policy will apply to the home itself, as well as fixtures and possessions in the property that belong to the homeowner. Coverage might insure you against hazards like fire, weather or theft damage.
  • Landlord Liability Coverage: Should a third party get hurt on your property, you, rather than your tenant, might be responsible for the losses. Use this coverage to safeguard yourself.
  • Improvements and Betterments Insurance: At times, your renter might make changes to the property that they cannot take with them when they move out. In other words, the change becomes permanent. This coverage can extend your landlord coverage to those items.

Keep in mind, renters should carry their own insurance for renters’ liabilities and possessions coverage.

Contact Us

Here at Island Wide Insurance Agency, we believe every real estate investor needs the insurance that’s best for them. Contact us today at 631-395-1000 or online to request a free, no-obligation quote.

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