What insurance do I need to flip a house?

Commonly property coverage designed for vacant or under-renovation homes (such as builder's risk or vacant dwelling), general liability, and flood coverage if applicable. A licensed agent should match coverage to your project.

Does a hard money lender require insurance?

Yes, lenders typically require proof of insurance before funding, with the lender named as specified. Requirements vary by lender.

What is builder's risk insurance?

It's coverage designed for a structure and materials during construction or renovation. Terms vary by insurer, so review what's covered and excluded.

Is homeowner's insurance enough for a flip?

Often not, because flips are typically vacant, under renovation, and business-owned. Confirm with your agent in writing.

Do I need flood insurance on a flip?

If the property is in a designated flood zone, lenders commonly require it. Check flood status during due diligence.

Fix and Flip Insurance Checklist: Coverage to Ask About

Why doesn't a regular homeowner's policy fit a flip?

Insurance is one of the most common last-minute closing delays. It's also where a flip can lose everything if the wrong policy is in place. This post is educational; coverage decisions belong with a licensed insurance professional.

Standard homeowner's policies are generally built for owner-occupied homes. A flip is usually vacant, under construction, and owned by an entity for business purposes. Many standard policies limit or exclude coverage for vacant properties or for losses during renovation. Ask your agent to confirm in writing that your policy fits your property's actual condition and use.

What types of coverage do flippers commonly consider?

Coverage	What it generally addresses	Questions to ask your agent
Builder's risk / course of construction	The structure and materials during renovation	Does it cover materials stored on site? Theft? What ends coverage?
Vacant dwelling / dwelling fire	The structure while vacant	How long can it be vacant? Which perils are covered or excluded?
General liability	Injuries or damage to others on the property	Limits? Does it cover the entity and guarantors?
Flood	Flood damage, typically excluded from standard property policies	Is the property in a flood zone? What does the lender require?
Contractor's coverage (their policy)	Contractor's liability and their workers	Certificates on file? Are you named as additional insured?
Umbrella	Extra liability limits above other policies	Does it apply to the entity and this property?

Not every flip needs every coverage, and names vary by insurer. Your agent should match coverage to the property, the scope, and your lender's requirements.

What insurance does a fix and flip lender require?

Requirements vary by lender and are spelled out in your loan conditions. Commonly:

Property coverage for at least an amount the lender specifies (often tied to replacement cost or loan amount)
Lender listed as mortgagee and/or loss payee using the exact wording the lender provides
Liability coverage at a minimum limit the lender specifies
Flood coverage where the property is in a designated flood zone or where required
Policy effective on or before the closing date
Coverage that fits a vacant property under renovation
Deductible within the lender's maximum
Binder or declarations page delivered to lender and title before closing

Ask your lender for its insurance requirements as soon as you're under contract, and send them straight to your agent.

Questions to ask your insurance agent

Is this policy written for a vacant property under renovation, owned by an LLC, for resale?
What perils are covered, and what is excluded (vandalism, theft, water damage, mold)?
Are materials stored on site covered before installation?
Does coverage change if the property is occupied, rented, or listed for sale?
How long does coverage last, and can it be extended if the project runs long?
What happens when the renovation is finished and the home is listed?
What are the deductibles, and do they meet my lender's limits?
Is the property in a flood zone, and what flood coverage options apply?
How must my lender be named on the policy?
How quickly can you issue a binder?

Contractor insurance checklist

Certificate of general liability insurance from the contractor's agent
Certificate of workers' compensation where applicable
Coverage dates span your project
Your entity named as additional insured, if your agent or attorney recommends it
Subcontractors' certificates if the contractor uses subs

When should you buy insurance on a flip?

Get quotes as soon as you're under contract, and bind coverage effective at or before closing. Waiting until the last week is how closings get delayed.

Example (hypothetical scenario): a flipper binds a standard landlord policy, then learns at the lender's review that it doesn't fit a vacant property under renovation. The closing slides while a new policy is written. Avoid this by telling your agent exactly what the project is from the first call.

What about the time between rehab and sale?

Coverage needs can change when the work is finished, when the home is listed, or if you decide to rent it instead. Call your agent at each transition. If you switch to a rental exit, you'll likely need a landlord policy and a long-term lender's insurance requirements.

How do you keep insurance costs from surprising you?

Build insurance into your holding cost sheet as a monthly figure, based on an actual quote rather than a guess. Ask about the premium for the full expected hold plus a few extra months, and whether the policy can be extended monthly if the project runs long. Flood coverage in particular can change the cost of a deal noticeably, so check flood zone status during due diligence, before you make your final offer.

Keep copies of every policy, binder, and certificate in your deal folder alongside your loan documents, so you can answer lender or title questions in minutes.

Key takeaways

A flip usually needs coverage built for vacant, under-renovation property, not a standard homeowner's policy.
General liability and, where applicable, flood coverage are common additions.
Lenders specify amounts, deductibles, and the exact way they must be named.
Get quotes the day you're under contract, and verify contractors' insurance.

Insurance ready, file ready

Ask for your lender's insurance requirements the day you go under contract. When you're ready, submit your deal, and see program details on the fix-and-flip loan page.