Real Estate "Flipper" Blanket Policy

[P and C Pro]

I have a client who is just starting an LLC purchasing and selling properties (I would probably call it flipping properties). He is wanting a blanket policy to handle 10 or so properties so with the constant purchase and sale he is not dealing with insurance as much. Any one here have any experience with this?

 

[WolfpackAgent]

I've heard of blanket policies for those who have a bunch of houses they rent out regularly, but not what you're asking. Some of the IA's on here will have better info, but it's a good idea although I'm not sure what the risk analysts think.

 

[adjusterjack]

If he is paying cash for the properties it should be easy enough to get him a package policy with a reporting form. He could report what he bought and sold once a month or quarterly if the intervals are longer. The insurance company would issue endorsement with an additional premium or a return premium depending on the values.

The problem comes if he is financing the purchase and you end up with lenders who aren't satisfied with a certificate of insurance and want a separate policy and separate.

Any commercial underwriter would know how to do this.

Bottom line, though, is he will still have to deal with the insurance, just maybe not as much.

 

[marshmallow]

Hi! I'm interested in the same question and I think I need to consult with an insurance agent. Anyway, thank you for your answers. By the way, as for real estate, I think this is a good area for investment. I want to make my money work for me to earn a passive income. So I found property for sale in Burgas Bulgaria from SUPRIMMO to make investments. I really liked this place and I want to show it to tourists from all over the world. In any case, I need to consult with a real estate agent to avoid risks and make a good deal. If you have any thoughts, please share them.

 

[marindependent]

There are a lot of issues with this. All I would be careful of.
To begin with, the loan component could be an issue, as has previously been stated.
Second, clients that are "flipping" properties are often renovating them and often themselves.
Third, the very nature of this business is "vacant homes" and all that comes with that.
Fourth, gosh this seems like it might be extra work for the agent constantly changing out properties. When they are commercial properties, sure, but residential?
The E&O considerations here are signficant.

 

[Hawaii Agent]

I have quoted this type of policy a few times and won't waste my time quoting it anymore. The premiums are significantly higher than if the "flipper" were to lie to the insurance carrier and just say they are renovating the property. Plus, insurance to these guys is just an expense and their main goal is to maximize profits, not protect themselves. They typically set up different LLCs to take in money from different investors which they believe limits their liability.