March 13, 2007
Insurance for Rehab projects
Q - How do I find an insurance company to cover my home rehab projects?
A - You’ve got a few options; if we’re talking residential houses (1-4 units) go to Foremost.com and do an agent search; Foremost will do vacant property in rehab up to two years. The agent who handles your P&C may have another company they use. Make sure any policy you buy is endorsed for Vandalism (VMM) and Liability. If Liability is not available, you may be able to extend Liability from your Homeowners policy. Make sure the name on the coverage matches the name of the person(s) or entity that purchased the property.
If you’re a real contractor (with insurance, bonding, licensing) then your P&C guy may have access to a builders risk program that allows vacant property under rehab.
Commercial property under rehab is a specialty/high risk coverage. Expect minimum premium to run $5000 and up per year. Coverage will need to obtained through a insurance broker with access to hard to insure coverage. If any insurance agents in your area specialise in real estate investors, they may have a brokerage relationship that can handle commercial coverage.
Each program will have underwriting guidelines and restrictions you’ll have to follow.
A good place for a referral is your local Real Estate Investors (REI) group. Good Luck
