Insurance for Fix-and-Flip Properties

Insurance for investment properties is fundamentally different from homeowner's insurance, and getting it wrong can leave you exposed to catastrophic losses.

Builder's risk insurance (also called course of construction insurance) is the primary coverage for active renovation projects. It covers the structure and materials against damage from fire, wind, theft, vandalism, and other perils during the construction period. Policies are typically written for 6–12 month terms and cost $2,000–$5,000 depending on the property value and renovation scope.

Vacant property insurance fills the gap between acquisition and renovation start, or between renovation completion and sale. Standard policies exclude vacant properties (typically defined as unoccupied for 30–60 days), so a separate vacant dwelling policy is required. These cost more due to higher risk of vandalism, theft, and undetected damage.

General liability insurance protects against claims arising from injuries on the property — a contractor falling off a ladder, a visitor tripping on uneven stairs, or a neighbor's property being damaged during construction. Carry at least $1 million per occurrence and $2 million aggregate.

Umbrella insurance provides additional liability coverage above your general liability limits. For active flippers, a $1–2 million umbrella policy costs $300–$600 annually and protects against lawsuit settlements that exceed your primary policy limits.

Always verify that your contractors carry their own general liability and workers' compensation insurance. Request certificates of insurance and confirm they're current before allowing any work to begin. If an uninsured contractor is injured on your property, you may be liable.