If you’re living in a house you intend to flip, do you know how much insurance you should have as a homeowner? Obviously, you will need enough homeowners insurance to replace the home if it were destroyed in a fire or a hurricane, but what else do you need? Make sure that your belongings are also covered. Your belongings like jewelry, clothing, art, and other items might cost more to replace than a standard homeowners insurance would cover. This is not including any updates you’ve already made to the home like granite countertops or new appliances.
Be sure to take an inventory of your belongings. Get photos and if warranted, get expensive items appraised. Then, keep any photos and appraisals in a safe deposit box away from your home. That way the proof of your belongings isn’t destroyed if the home that you are flipping is.
Also, don’t forget to include home extension insurance for any additional structures. If the home you are flipping has a garage, pool, pool house, cabana, gazebo, or any other structure, be sure that is covered as well. I knew a family who moved into their new home a chicken coop that came with the house. A few months later, their coop was destroyed. It was an old, but spacious and useful coop. Thankfully, the coop was covered as an outbuilding that had already been accounted for, but at the time, they were assuming it was a total loss. So, please consider every structure on your property when insuring it.
While many people get a standard $100,000 coverage for liability insurance on their homes, many lawyers now suggest $500,000 in liability insurance coverage to be on the safe side.
If you’re thinking of purchasing an old home with ornate decorative touches like handcrafted stained glass or wooden carvings, realize that some policies won’t cover these types of things. They’re expensive and difficult to create now that there are less artisans capable of doing this style of work. Be sure to take many photos and talk to your insurance agent about how details like that are handled.
Also, remember that flood insurance is separate from standard insurance. If there is a flood risk for your home, you may need a separate policy for that.
Are You Looking for a Hard Money Loan to Flip a House Or Buy A Rental Property?
Paces Funding is a hard money lender offering hard money loans to purchase and renovate non-owner occupied residential and commercial properties throughout the Atlanta, Nashville, Florida, or the North and South Carolina metropolitan areas. Our application process for hard money loans is easy. Just fill out this very simple online form and you will be contacted shortly. Unlike other lenders, the window between applying and funding is very small. We have funded properties in as a little as one day, but typically funding hard money loans takes about seven to ten days.
Call us at 404-814-1644 or contact us online to find out whether you might qualify for this type of funding. In the meantime, check to ensure that you meet our loan criteria. Our loan amounts can be up to 65 percent of the after-repaired value of the collateral—and if you use the loan for renovation or construction, the loan amount can be based on the collateral’s improved value