Buying distressed homes, renovating them, and selling them for a profit can be a great investment strategy—but it also comes with unique risks.
A standard homeowners insurance policy is usually not designed for fix-and-flip properties, especially if the home is vacant or under renovation.
That’s where Fix-and-Flip Insurance comes in.
What Is Fix-and-Flip Home Insurance?
Fix-and-Flip Insurance is a specialized insurance solution designed to protect investment properties that are being purchased, renovated, and resold.
Rather than a single policy, fix-and-flip insurance is often a combination of coverages tailored to the stage of your project.
Depending on the property, this may include:
- Builder’s Risk Insurance
- Vacant Home Insurance
- General Liability
- Dwelling Fire (DP) Insurance
- Course of Construction Coverage
Why Can’t I Use a Regular Homeowners Policy?
Most homeowners insurance policies are intended for owner-occupied homes.
A fix-and-flip property is different because it is often:
- Vacant
- Under construction
- Owned as an investment
- Occupied by contractors rather than the homeowner
These factors increase the insurer’s risk and may result in denied claims if the property is insured under the wrong policy.
What Does Fix-and-Flip Insurance Cover?
Coverage varies by carrier, but may include protection for:
The Building
- Fire
- Wind
- Vandalism
- Theft
- Smoke damage
- Certain water losses
Building Materials
- Cabinets
- Flooring
- Lumber
- Windows
- Roofing materials
- Plumbing supplies
- Electrical materials
- HVAC equipment
Liability Protection
If someone is injured on the property during the renovation, General Liability coverage can help protect against lawsuits and covered legal expenses.
When Do You Need Builder’s Risk Insurance?
Builder’s Risk Insurance is generally recommended when:
- Construction has started
- Contractors are performing renovations
- Structural work is being completed
- Kitchens and bathrooms are being remodeled
- Electrical or plumbing systems are being replaced
- Roofing is being replaced
- Additions or ADUs are being built
Builder’s Risk protects the property while construction is underway.
When Is Vacant Home Insurance Enough?
Vacant Home Insurance may be appropriate if:
- The property is sitting vacant before work begins
- You’re waiting on permits
- Only minor cosmetic work is planned
- No major remodeling is taking place
Once construction becomes more substantial, you should review whether Builder’s Risk coverage is needed.
Do You Need Both?
Sometimes, yes.
A common insurance timeline looks like this:
Phase 1 – Purchase
Home is vacant.
Coverage:
- Vacant Home Insurance
↓
Phase 2 – Renovation Begins
Construction starts.
Coverage:
- Builder’s Risk Insurance
- General Liability (when appropriate)
↓
Phase 3 – Project Completed
Property is sold or rented.
Coverage:
- Homeowners Insurance (if owner-occupied)
- Landlord (DP-3) Insurance (if rented)
What Isn’t Covered?
Every policy is different, but common exclusions may include:
- Faulty workmanship
- Contractor mistakes
- Wear and tear
- Flood (unless added)
- Earthquake (unless added)
- Employee theft
- Intentional damage
Always review your policy with your insurance advisor.
Who Needs Fix-and-Flip Insurance?
This coverage is ideal for:
- Real estate investors
- House flippers
- Property developers
- LLC-owned investment properties
- Owner-builders
- Contractors purchasing investment properties
Frequently Asked Questions
Does homeowners insurance cover a flip house?
Usually not. Most standard homeowners policies are intended for owner-occupied residences and may not cover vacant homes or active renovation projects.
Does Builder’s Risk include liability?
Generally, no. Builder’s Risk protects the property itself. General Liability is a separate policy that protects against claims involving bodily injury or property damage to others.
Can I insure an LLC-owned flip?
Yes. Many Builder’s Risk and commercial property policies can be issued in the name of an LLC or other business entity.
How long does coverage last?
Most Builder’s Risk policies are written for 3, 6, or 12 months, with extensions often available if construction takes longer than expected.
Tips for California Real Estate Investors
Before buying a flip property:
- Notify your insurance agent before renovations begin.
- Make sure the policy reflects the property’s actual use.
- Verify that your contractors carry their own General Liability and Workers’ Compensation insurance.
- Review whether flood or earthquake coverage is appropriate for your location.
- Update your insurance as the project moves from purchase to renovation to sale or rental.
Final Thoughts
Fix-and-flip projects involve unique risks that standard homeowners insurance may not cover. Whether the property is simply vacant or undergoing major renovations, having the right insurance at each stage of the project can help protect your investment from unexpected losses.
Working with an experienced insurance broker can help ensure your coverage evolves as your project progresses.
Need Fix-and-Flip Insurance in California?
At StarWest Insurance Services, we help investors, contractors, and developers insure projects from purchase through completion.
We can help with:
- Builder’s Risk Insurance
- Vacant Home Insurance
- General Liability
- Rental Property Insurance
- Landlord (DP-3) Insurance
- New Construction Insurance
- Owner-Builder Projects
Contact StarWest Insurance Services
Westminster Office
13752 Goldenwest St.
Westminster, CA 92683
Irvine Office
15375 Barranca Pkwy, Building L
Irvine, CA 92618
Office: (714) 893-7271
Cell/Text (James C.Q. Banh): (714) 867-7799
No Broker Fees Since 1995