Trouble Insuring Old Home
Hello all- We are trying to close soon on a lovely home in Prospect Park South. The house was built in 1900 and current owners haven’t done much to it since the 60’s. We are planing a renovation that will include replacing electric and plumbing and renovating the kitchen and baths, along with some other…
Hello all-
We are trying to close soon on a lovely home in Prospect Park South. The house was built in 1900 and current owners haven’t done much to it since the 60’s. We are planing a renovation that will include replacing electric and plumbing and renovating the kitchen and baths, along with some other cosmetic work.
The issue I’m running into is that because of the state of the house and our renovation plans, the insurance companies won’t give us a homeowners policy and will only give us a Builders Risk policy. BUT our mortgage agent says we need to have a homeowners policy to close.. Has anyone run into this before? I would hate for this to kill our deal since it’s such a great house… Any advice would be greatly appreciated!
Thank You!
Call a cheap insurance carrier (i.e. the type with bus ads) a day or two before closing and they will generate a policy sight unseen. Oh yeah, don’t mention any issues. Once they inspect they may very well cancel the policy. This happened to me. As scary as it is the cancellation is effective 30 days later so you have time to find another policy including a builders policy.
Thank you everyone! I may have found someone who can swing it without the builders policy but I’ll be sure to check up on your suggestions. I’ll let you know how it turns out.
Liberty Mutual will actually write you a homeowner policy from day 1. We do allow the renovation of a home and actually will give you a major discount because of it. If you’de like a quote please contact me. Ryan Fortier 212-398-2480 x50500.
the others are correct. you get a homeowner’s policy, switch to a builders, then switch back. homeowner’s will refund any pre-paid amount if you switch companies before the end of the term. hopefully your renovation will be for less than a year anyway.
good luck, one of my favorite areas in brooklyn!
The bank should accept the builder’s policy in lieu of the homeowner’s. The builder’s policy usually offers more coverage anyway which is what they are concerned with.
I take builder’s policies all the time
-Adam Dahill
WCS LENDING
adahill@wcslending.com
Speak to a supervisor at the lending bank. Someone with experience will understand the issue, hopefully.
Talk to your potential insurer about getting a homeowner’s policy that then gets converted to a Builder’s Risk policy once you get your permits and begin renovation. You can do this through Brownstone Agency — and I’m sure other insurers do it as well. The BR policy will cost you mucho bucks, unfortunately, but it will also give you insurance against untoward events that may happen with the renovation.
Talk to your broker about getting a homeowner’s policy that is convertible to a builders risk by the time you are ready to renovate — usually it take a while to draw up plans, get permit, etc and you will need homeowners coverage in the meantime.