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Last updated: May 1, 2024
Landlord insurance and fix and flip insurance for 1 to 4 unit residential properties.
We help real estate investors purchase the right insurance coverage at the most competitive price for rental properties and fix & flip properties.
Insurance for rental properties. Let's make sure you have proper coverage in place to protect your property, your income and your liability. You don't need to compromise on coverage in order to lower your premium -- our landlord insurance program shops carriers that specialize in serving landlords.
Insurance for flips and rentals that are being rehabbed -- also referred to as "Builders Risk Insurance". Complete coverage to protect the value of your property and insure against accidents that can happen on your job site. Our fix & flip insurance program shops the most competitive carriers for this specialized type of insurance so you can rest easy knowing you're protected and not overpaying for coverage.
Fix and Flip Insurance is commonly referred to as builders risk insurance. Builders risk is a liability coverage, referred to in Fix and Flip insurance policies as "General Liability" or "Premises Liability". Builders risk protects you, the fix and flip investor (your business entity, usually an LLC, and the members of your entity), from liability if there is an accident that happens at the property. Typically this coverage amount is $1,000,000 per occurrence (per accident) and $2,000,000 in the aggregate (maximum for the annual term of the policy if multiple accidents occur).
| Property Insurance | |
|---|---|
| Mandatory | Yes |
| AM Best Rating | A- VIII or greater |
| Term | 1 Year |
| Limits | - If Replacement Cost is greater than Loan Amount, use the greater of 80% of the Replacement Cost or the Loan Amount- If Replacement Cost is less than Loan Amount, use Replacement Cost |
| Deductible | $5,000 |
| Accepted Policy Types | - Dwelling Fire. Must be "Special Form"- Commercial Property. Must be "Basic" or "Special Form" |
| Cancellation | 30-Day notice |
| Exclusions | - No windstorm / hail exclusion- No named storm exclusion |
| Lender's Designation | Mortgagee |
| General Liability Insurance | |
|---|---|
| Mandatory | Yes |
| AM Best Rating | A- VIII or greater |
| Term | 1 Year |
| Limits | - $500,000 per occurrence- $1,000,000 in the aggregate |
| Deductible | $1,000 |
| Coverage Details | Occurrence basis for losses (not claims-made) |
| Cancellation | 30-day notice |
| Lender's Designation | Additional Insured |
| Business Interruption Insurance | |
|---|---|
| Mandatory | Yes |
| AM Best Rating | A- VIII or greater |
| Term | 1 Year |
| Limits | One year of effective gross rental revenue |
| Coverage Details | Provision for Actual Loss Sustained basis is acceptable |
| Cancellation | 30-day notice |
| Lender's Designation | Mortgagee |
| Flood Insurance | |
|---|---|
| Mandatory | If in a flood zone (must obtain Flood Zone Determination) |
| AM Best Rating | A- VIII or greater |
| Term | 1 Year |
| Limits | The greater of $250,000 or the loan balance |
| Cancellation | 30-day notice |
| Lender's Designation | Mortgagee |
| Mortgagee Clause | OfferMarket Capital LLC ISAOA/ATIMA627 S Hanover StBaltimore, MD 21230 |
| Condos | - Blanket policy may be used if it allows the individual Unit to be included in coverage.- Homeowner association maintains an “all risk” coverage for common areas, fixtures, personal property, equipment at 100% of their insurable value on a replacement cost basis. |
| PUDs | - Project’s blanket policy may be used if it allows the individual Unit to be included in coverage.- Homeowner association maintains an “all risk” coverage for common areas, fixtures, personal property, equipment at 100% of their insurable value on a replacement cost basis. |
| Instructions | - Use ACORD form to ensure compliance- Send insurance certifications, invoices or paid receipts, no later than 24 hours before closing.- Send final policy documents, no later than 60 days after closing.- Borrower must notify carrier if property becomes vacant or unoccupied and obtain a vacancy permit from the insurance carrier for the entire period of vacancy. |
| Property Insurance | |
|---|---|
| Mandatory | Yes |
| AM Best Rating | A- VIII or greater |
| Term | 1 Year |
| Limits | - Limit is Replacement Cost. Use value from the appraisal report or Replacement Cost Estimator- Limit is Loan Amount. If loan amount is less than Replacement Cost, you must have an Agreed Value Policy or have zero coinsurance |
| Deductible | $5,000 |
| Accepted Policy Types | - Dwelling Fire. Must be "Special Form"- Commercial Property. Must be "Basic" or "Special Form" |
| Cancellation | 30-day notice |
| Exclusions | - No windstorm / hail exclusion- No named storm exclusion |
| Lender's Designation | Mortgagee |
| General Liability Insurance | |
|---|---|
| Mandatory | Yes |
| AM Best Rating | A- VIII or greater |
| Term | 1 Year |
| Limits | - $1,000,000 per occurrence- $2,000,000 in the aggregate |
| Deductible | $1,000 |
| Coverage Details | Occurrence basis for losses (not claims-made) |
| Cancellation | 30-day notice |
| Lender's Designation | Additional Insured |
| Flood Insurance | |
|---|---|
| Mandatory | If in a flood zone (must obtain Flood Zone Determination) |
| AM Best Rating | A- VIII or greater |
| Term | 1 Year |
| Limits | The greater of $250,000 or the loan balance |
| Cancellation | 30-day notice |
| Lender's Designation | Mortgagee |
| Mortgagee Clause | OfferMarket Capital LLC ISAOA/ATIMA627 S Hanover StBaltimore, MD 21230 |
| Condos & PUDs | May be covered under borrower’s blanket coverage, so long as the general limit requirements are followed. |
| Instructions | - Use ACORD form to ensure compliance- Send insurance certifications, invoices or paid receipts, no later than 24 hours before closing.- Send final policy documents, no later than 60 days after closing.- Borrower must notify carrier if property becomes vacant or unoccupied and obtain a vacancy permit from the insurance carrier for the entire period of vacancy. |
OfferMarket Insurance is a licensed insurance agency specialized in providing real estate investors with insurance for rental properties and fix & flip investment properties.
OfferMarket Insurance shops for the most competitive policy that meets your preferences and our lending guidelines.
If you are rehabbing or renovating a property or building new ground up construction, you should have a Builder's Risk policy. This is an endorsement in the General Liability Insurance coverage. OfferMarket Insurance policies automatically include Builders Risk coverage when the property is under renovation or construction.
If the effective age in the appraisal report is less than 15 years, you cannot use Functional Replacement Cost and you must use Replacement Cost Value.
When our clients (borrowers) and their preferred insurance agent try to use a personal lines insurance policy to meet our guidelines, they are surprised to see that -- beyond being the Mortgagee in the Mortgagee Clause -- we require that we are also an Additional Insured. While many insurance professionals think these are the same or equivalent, they are actually different in the following way.
Having the lender as an Additional Insured extends liability to the certificate holder on the same terms provided to the named insured while the mortgagee extends rights in property coverage.
Clients of our private lending platform, OfferMarket Capital, are strongly encouraged to use OfferMarket Insurance to save time and money.
Given that our insurance guidelines are specific and require a commercial policy, we tend to encounter significant delays and operational expense when our client (borrower) insists on using their preferred insurance agent. This is particularly an issue when the insurance agent specializes in personal lines, and is not specialized in commercial lines. For this reason, we charge a $250 insurance review fee which will be included on your HUD-1/ALTA settlement statement.
If you are a client of OfferMarket Capital for either a DSCR loan or a fix & flip loan, your insurance needs to be paid for in full either on the HUD-1/ALTA settlement statement, or directly through your insurance agent prior to settlement. If you pay directly through your insurance agent, we require a paid receipt for verification.
If you are a client of OfferMarket Capital using our DSCR loan you are required to escrow your insurance premium. This means your assigned servicer will collect insurance monthly as part of your PITIA monthly mortgage payment and remit to the insurance carrier on your behalf.
If you are rehabbing a house, there is a good chance you will not need fix & flip insurance for a full your. As soon as you complete your construction, you can cancel your policy and receive a prorated refund and implement a more cost effective and appropriate property insurance policy while you wait for your property to sell or while you refinance into a DSCR rental loan.
AM Best is a financial services rating agency that specializes in assessing the financial strength and size of insurance companies. Learn more about AM Best Ratings.
Builders risk insurance protects your property and on-site construction materials throughout the renovation, construction or rehab phase of your fix and flip or BRRR project. Perils covered by your builders risk insurance policy can vary by insurance carrier and your selected form (basic, special) and most commonly include fire, lightning windstorm, hail, falling debris, vandalism, and theft.
Your builders risk policy is terminated when one of the following events occur:
Most builders risk policies are on a Completed Value Form where the property insurance dwelling coverage policy limit equals the property's ARV or ARV replacement cost estimate.
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