The term "Flipping" houses has almost become an obscenity these days. But the fact remains that many individuals and businesses are still buying grossly discounted, short sale, and foreclosure houses fixing them up and reselling. As an insurance broker with the Guilderland Agency in Albany, NY I know nothing about how to properly run a house flipping business. What I do know is how to set up an insurance policy that will cover the individual or business for the vast number of exposures that are present.
I'm sure there are many variations of this business model, but for the purposes of this post I will try to stick to the most common features I have seen with my current clients.
My average client who engages in the house flipping business has at any given time between three and five homes being remodeled. To begin with most insurance carriers do not like the fact that work is being done at multiple locations. Throw in the fact that these houses may only be owned by the insured for a matter of weeks and finding coverage can become a nightmare. Insurance carriers like to see stability, and the pure nature of the house flipping business is not stability. So what is a house flipping business to do?
Most agents would have you set up a individual Dwelling Fire and/or Builder's Risk policy for each property. This is a paperwork nightmare for everyone involved and the short nature of the policies leads to a tranche of unnecessary fees paid for the creation and cancellation of so many policies.
This is NOT the only way to insure a house flipping business. I have access to a company that will write a blanket policy for the course of one year which will cover property and liability on each property you own. How ridiculously easy is that?
Basically this carrier will write blanket liability on all properties. For each property named on the policy there is a blanket $1,000,000/$2,000,000 limit of liability. What this means is that you will only need ONE policy the entire year. When you buy a new property, you call me and we add it to the policy. You now have Property Coverage (Whatever you determine necessary) and Liability Coverage on that property. When you sell the house, all you need to do is call me and we take the address off the policy. You are then no longer charged for that address. This policy flexes throughout the year with number of houses you own.
The best part however is the billing. No more down payments and refunds. Once the initial down payment is made your policy is credited and debited premium based on the number of houses that are named on the policy. So if you start with four houses and sell two, your next premium installment just adjusts accordingly.
I know this is a commercial and some people don't like reading commercial-esk posts. But this product is truly fantastic for house flippers. So anyone interested in discussing this policy further that is based in New York State please don't hesitate to contact me.
Thank you,
Ryan Hanley
www.guilderlandagency.com
www.linkedin.com/in/ryanhanley
