Insurance for House Flippers and Rehabbers in Louisville: Builder’s Risk to Rental

Insurance for House Flippers and Landlords Louisville KY
Insurance for Flippers & Rehabbers in Louisville: Builder’s Risk to Rental
insurance for house flippers rehabbers rental dwelling louisville ky
Flipping houses in Louisville? Don’t risk your profit on the wrong policy. From Builder’s Risk to Rental Dwelling, our independent agency (40 years exp) protects your renovation.

From Fixer-Upper to Cash Flow: The Louisville Investor’s Guide to Insurance

If you are investing in the Louisville real estate market—whether you are breathing new life into a Victorian in Old Louisville, flipping a bungalow in Germantown, or rehabbing a rental in Shively—you know that speed and margins are everything.

You also know that a “standard” insurance policy doesn’t always fit the chaotic lifecycle of a flip.

At our agency, we have been partnering with Louisville real estate investors for 25 years. Our lead independent agent has over 40 years of experience navigating the local property market. We have seen the “boom” times, and we have helped clients survive the “busts.”

Most importantly, we know that House Flippers and Rehabbers have different risks than the average landlord. You aren’t just renting out a home; you are a construction site manager, a developer, and a property owner all rolled into one.

Here is why a standard “Rental Dwelling” policy might leave you exposed, and how to structure your coverage to protect your profit margin.

Phase 1: The Purchase & The “Vacant” Risk

The moment you close on a distressed property, your risk clock starts ticking.

Many new investors make the mistake of buying a standard Homeowners or Landlord policy immediately. This is a dangerous gamble.

If the property is going to sit empty for more than 30-60 days while you pull permits or line up contractors, a standard policy’s “Vacancy Clause” will kick in. This often removes coverage for:

Vandalism (broken windows, graffiti).
Theft (ripped out copper wiring or appliances).
Water Damage (frozen pipes in an unheated house).

The Solution: For the initial phase, you often need a specific Vacant Building Policy. This ensures that the physical shell of the building is protected against the specific risks of emptiness, including the threat of squatters or trespassers.

Phase 2: The Rehab (Builder’s Risk)

Once the hammers start swinging, your insurance needs change completely.

If you are doing structural work, knocking down walls, or adding square footage, a standard Landlord policy (DP-3) is not designed for that risk. If a wall collapses or a fire starts due to electrical work, the carrier could deny the claim because the “use” of the building changed from “residential” to “construction.”

The Solution: Builder’s Risk Insurance (Course of Construction)
This is the gold standard for Rehabbers. It covers:

The Structure: The existing building value.
Materials: The lumber, flooring, cabinets, and fixtures waiting to be installed (even if they are sitting in the garage).
Theft: Protection against the theft of building materials (a major issue in active flips).
Liability: Coverage if a subcontractor or a curious neighbor gets hurt on your job site.

Phase 3: The Hold (Rental Dwelling / DP-3)

Once the Certificate of Occupancy is issued and the “For Rent” sign goes up, you transition to Rental Dwelling Insurance.

This is where many investors try to cut costs, but “cheap” insurance can cost you thousands. In the insurance world, we typically look at three types of policies for landlords:

DP-1 (Basic): The bare minimum. It usually covers Fire and Lightning, but often excludes water damage, theft, and vandalism. It pays “Actual Cash Value” (depreciated value), not Replacement Cost. Avoid this unless the property is in very poor condition.
DP-2 (Broad): A middle ground that adds named perils like windstorm, hail, and falling objects.
DP-3 (Special): The “Gold Standard” for landlords. It covers “all risks” unless specifically excluded and usually pays Replacement Cost. If you have just spent $50,000 renovating a kitchen, you want a DP-3 policy to ensure you get paid enough to rebuild it if it burns down.

Liability: The Investor’s Shield

Whether you are flipping or holding, General Liability is non-negotiable.

Premises Liability: If a tenant trips on a loose carpet or a prospective buyer slips on an icy walkway during an open house, you are liable.
Loss of Rent: If a covered peril (like a fire) makes the unit uninhabitable, a good policy will pay you the Fair Rental Value while the property is being repaired, preserving your cash flow.

What type of Insurance do I need for Rental Properties in Louisville KY

What does Landlord Insurance Cover?

Why Louisville Flippers Choose Us

You deal with contractors who don’t show up and material costs that change weekly. You don’t need an insurance agent who slows you down.

1. Speed & Agility:
We know that in a hot market, you need a Binder of Insurance now to close a deal. We move at the speed of your business.

2. Flexible Terms:
Flipping a house in 4 months? You shouldn’t have to pay for 12 months of insurance. We can help structure policies that allow for cancellations or transitions from Builder’s Risk to Rental Dwelling without heavy penalties.

3. The “Independent” Advantage:
We aren’t tied to one carrier. We shop your risk across multiple top-rated insurers who specialize in vacant and renovation properties. We find the carrier that has the appetite for your specific project.

4. 40 Years of “Been There, Done That”:
We have seen the outcomes of poor coverage. We have helped clients recover from fires, floods, and lawsuits. When you work with us, you are getting an advisor, not just a salesperson.

Ready to Protect Your Next Project?

Don’t let a gap in coverage eat into your profit margin. Whether you are buying your first rental or managing a portfolio of flips, let our 40 years of experience work for you.

Contact us today for a comprehensive review of your portfolio. And while you are at it, check out our Google Reviews to see why Louisville’s top investors trust us with their assets.

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FAQ for Investors

Q: Does my General Liability cover my subcontractors?
A: generally, no. You should always require your GC and subcontractors to carry their own General Liability and Workers’ Comp insurance and list you as an “Additional Insured.” We can help you review their Certificates of Insurance (COI).

Q: Can I insure a property owned by an LLC?
A: Absolutely. In fact, we highly recommend it for asset protection. We can write the policy in the name of your LLC, Trust, or partnership.

Q: What is “Loss of Rents” coverage?
A: If your rental property is damaged (e.g., by a fire) and your tenants have to move out, this coverage pays you the rent you would have collected during the repair period, ensuring you can still pay the mortgage.