3 Steps to Sell Builders Risk to House Flippers

Knowing your audience is key to building a business. And there’s a growing demographic (that could be within your existing client base) who needs your attention: house flippers.

If you look around, you’ll likely spot their home renovation handiwork everywhere. They buy homes that need work for low prices, then fix cosmetic problems or redesign the homes to add value. In the end, they make a tidy profit selling it to the next owner. 

In fact, CoreLogic found the percentage of properties sold by a business entity reached a high of 41 percent in Q3 2018, with 10.9 percent of all home sales identified as flips in Q4 2018 (a near-historic high).

But what sets them apart from other homeowners or property owners taking on renovation projects?

In a word: time. House flippers often work under tight timelines to  secure a profit on their investment before the loan comes due. Whether they’re planning to make minor cosmetic changes or gutting it completely, these property owners are looking for the most efficient use of time and money.

To answer this need and help you prepare to have a conversation with house flippers about the need for home remodeling insurance, consider these three steps:

1) Study Up
You’ll need to be ready with answers to common questions. Many property owners are under the [mistaken] impression that a homeowners insurance policy will cover the home improvement project. However, house flipping bears the same significant risks (and potentially devastating losses) as any other home remodeling project.

Whether the renovations are minor (e.g. replacing flooring and cabinets) or major (e.g. moving a load-bearing wall or adding another story). As soon as sledgehammers start breaking through walls or old flooring comes up, any number of risks could be waiting.

Need a brush-up on remodeling builders risk insurance? Check out our FAQ here.

2) Anticipate Contractor Timetables
House flippers need to work fast, but not every timetable is the same. Generally speaking, flippers who plan to do minor renovations are looking to move extra fast. If the changes are minor or represent 15 percent or less of the existing structure value, these clients may even be interested in a vacant home insurance policy.

However, if house flippers are planning to make more extensive, expensive changes, they may extend their timetable. This is typically due to mandatory inspections and permits.

remodeling builders risk insurance policy, like the Builders Risk Plan insured by Zurich, can keep the project covered during that time. Remodeling policies are available with policy terms as low as six months. They also can offer short-term extensions (with underwriting approval) to provide additional flexibility.

3) Know Where to Meet Clients
Ready to take on this growing demographic, but not sure where to look? After mining your existing book of business, consider getting involved with house flipper associations in your area. You can also utilize the National Real Estate Investors Association and  fix and flip / real estate groups on Meetup.

If you want more options, talk to local realtors and bank associates.They can tell you about properties before they are listed. This also makes you available to potential buyers.


Just like other remodeling clients, house flippers want to avoid unexpected expenses to their fixer-upper investments. Read about their potential risks and how remodeling course of construction insurance can help when you download our resource, Renovation Risks: Why Homeowners Need Remodeling Insurance.

This is intended as a general description of certain types of insurance and services available to qualified customers. Your policy is the contract that specifically and fully describes your coverage. The description of the policy provisions gives a broad overview of coverages and does not revise or amend the policy.

 

Why Home Investors Need a Builders Risk Policy
Remodeling can be financially risky for homeowners. Download US Assure’s resource for insights on the value home remodeling insurance offers personal lines clients.
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