Why would you need Vacant Home Insurance? Are you a rehabber or house flipper? Do you have a rental that is undergoing renovations? If so, are you insuring these properties correctly? Vacant homes need different coverage than an occupied home, especially when they are under renovation.
So what is the correct way to insure these vacant properties? We will look at 4 ways to insure vacant homes in Florida. Most of these options cover existing buildings based on their Actual Cash Value, but sometimes they can have Agreed Value or Replacement Cost.
DP-1 Policy with Vacant Endorsement
Several regular Florida companies offer a DP-1 policy that can be updated to include coverage for vacant properties. If it’s a rental, you can remove this endorsement and adjust it back to a regular DP-1 policy. Sometimes the DP-1 is the chosen option, but often times, it is better to change it to DP-3
Learn More: DP-3 vs DP-1 insurance
Vacant Home Insurance Policy (With or Without Renovations)
This policy is strictly for Vacant occupancy. This is usually the right policy for most rehabs and flips. It is similar to DP-1 coverage, but it can’t be changed to occupied if you put a renter into the property. You will need to select a timeframe and describe the scope of work to make sure the policy is set up correctly. Also, if you are using a hard money lender, know the lender requirements, as they often require a full year, even if you don’t plan to need it that long.
Builder’s Risk Policy
Builder’s Risk is similar to the Vacant Home Insurance Policy, although it is for much larger projects. Some companies will only write this for complete renovations down to the studs. Others will write this type of policy as long as the renovations exceed 20% of the existing building value. These builder’s risk policies often have a lot of supplemental coverages for large construction projects. This can also be for ground-up, new construction. Similar to the Vacant Home Insurance policy, you should know your lender requirements.
Blanket Policy with Vacant Occupancy
Several companies offer blanket policies where you can list multiple properties on the same policy. You can add and remove properties as needed, and you can change the occupancy to occupied or vacant as needed. This type of policy is very convenient if you are active with a lot of property changes. However, it’s not always the most cost effective.
Conclusion – Vacant Home Insurance
If you have a vacant home or will have one soon, you want to make sure you have the proper coverage. Our team at Think Safe Insurance works with many investors and we have options for vacant home insurance. Give us a call at 813-425-1626 or request a quote online.