Bought to fix, insured to sell.
Renovation builder's risk for the existing house and the work going into it, vacant dwelling coverage for the weeks before and after, owner's general liability for the job site, theft of materials and water damage, and the mortgagee and loss payee wording a hard-money lender asks for before funding.
By Sam Alishahi · CA Insurance License #4348151 · Reviewed October 2026 · How this page is researched
A flip is a vacant house, a construction site and a sale in waiting
A fix and flip changes shape every few weeks, and the policy has to follow it. On closing day it is an empty dwelling. Once the crew starts it is a renovation site with open walls, new materials on the floor and tradespeople walking through. When the work is done it sits vacant again until escrow closes. A renovation builder's risk form is written for that middle stretch: it insures the existing structure plus the improvements as they go in, usually on a twelve-month term with a minimum earned premium, so selling early does not return the whole premium.
Vacancy is the part that catches investors. Many standard homeowners and dwelling forms stop paying for vandalism once the house has been empty for more than sixty consecutive days, and they treat a building under renovation as not vacant only while the work is substantial and continuous. If the permit is delayed and the crew is not on site, a vacant dwelling policy fills the gap, and I switch to the renovation form the week the work begins. Course of construction and vacancy are two different products, and the dates matter.
Liability is separate from the building. The owner needs premises and operations coverage for anyone hurt on the lot, and every contractor should show a current license, general liability and workers' compensation certificate. California's owner-builder exemption in Business and Professions Code section 7044 is written for owners who are not building to sell, and a sale within one year after completion creates a rebuttable presumption that the work was for sale, so a flipper using unlicensed workers can end up carrying the employer's risk. Hard-money lenders want to see all of it, with their name as mortgagee and loss payee, before they wire a draw.
- Renovation builder's riskExisting structure plus improvements while the work is underway.
- Vacant dwellingThe empty weeks before the crew starts and after it leaves.
- Owner's liabilityPremises and operations claims against the owner, separate from the contractor's.
- Lender wordingMortgagee and loss payee clauses for hard-money and private lenders.
What underwriters will ask
Having these ready means I can go to market on the first call. The quote form asks for the same things, and anything you don’t know yet can wait.
- Property: address, year built, square feet, units and the purchase price.
- Scope: renovation budget, structural versus cosmetic work, permits pulled and the start date.
- Schedule: expected months of work, the listing date and whether anyone will live there.
- Contractors: general contractor license number and certificates for liability and workers' comp.
- Lender: hard-money or private lender name, loan amount and the exact loss payee wording they require.
- Portfolio: other flips in progress and any losses on past projects.
Fix and flip insurance, answered
Can I keep the seller's homeowners policy or buy a regular one?
Usually not for long. An investor who does not live in the house and is tearing out kitchens is outside what a homeowners form is built for, and the vacancy and construction conditions in most dwelling forms work against a flip. A renovation builder's risk or vacant dwelling policy is written for the project itself.
What is the difference between course of construction and vacant dwelling coverage?
Course of construction, the renovation builder's risk, insures the structure and the improvements while substantial work is going on. Vacant dwelling coverage insures an empty house that is not under active renovation. A flip often needs both at different points, and the switch date should match when the crew actually starts and stops.
Why does my lender want to be named as loss payee?
A hard-money lender is lending against the house and the improvements, so they want any claim payment to protect their collateral. The mortgagee clause covers the building loan, the loss payee clause covers the improvements, and most lenders will not fund a draw without a certificate showing both.
Does the policy cover theft of materials and copper?
Theft of installed and stored materials is a common claim on renovation sites. Many renovation builder's risk programs cover it with a separate deductible and conditions such as a locked site or secured storage, so I confirm the wording before you order lumber and appliances.
What if I hire my own workers instead of a licensed contractor?
The Contractors State License Board warns that an owner-builder may be asked to pay for injuries to workers or unlicensed subcontractors who lack their own coverage, and the owner-builder exemption is not meant for property being improved to sell. Licensed contractors with their own liability and workers' compensation certificates keep that risk where it belongs.
Do you insure flips outside California?
Yes, in 49 states and D.C. Renovation builder's risk programs are national, and the same questions apply everywhere: scope, schedule, vacancy, contractors and the lender. Local wrinkles are mostly weather, hurricane and freeze conditions, and I check them per state.
Tell me the scope and the close date. I'll cover the project.
Send me the address, the scope of work, your start date and your lender's requirements. I'll quote the renovation builder's risk, the vacant dwelling coverage and the owner's liability as one project, and send the certificate your lender needs.
Alishahi Insurance · Saman Alishahi, independent insurance broker, California License #4348151. General information, not a quote or a promise of coverage; coverage depends on underwriting and the terms, conditions and exclusions of the policy actually issued. Some policies may be placed with nonadmitted (surplus lines) insurers, which are not members of the California Insurance Guarantee Association (CIGA).
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