Insurance and Finance

Flipping Out

By Mary O. Parker 1.13.16

Forbes magazine includes five Texas cities on its 2015 List of Best Buy Cities in the U.S.: Austin (No. 1), Houston (No. 3), Dallas, (No. 5), San Antonio (No. 6), and Fort Worth (No. 10).

With investors flocking to the Lone Star State, grabbing great deals could prove tough. It becomes easier, however, when the list of potential investments includes properties in need of renovation or modernizing. These often offer the best deals.

But, even when paying bargain basement prices, investment properties can still cost a pretty penny — one you don’t want to risk losing!

Amber Harrelson, a Texas Farm Bureau Insurance Agent based in Austin County, suggests protecting your investment by putting a builders risk policy in place while prepping the property.

“Builders risk insurance is specifically designed to cover buildings under construction, not just new construction, but also for buildings that are being remodeled or repaired,” Harrelson explains. “Buildings can be subject to many different risks while under construction, they could catch on fire, be damaged by high winds, hail, or experience many other causes of loss.”

In addition to insuring the structure, builders risk policies can provide protection for on-site construction materials that haven’t been used yet. Such policies cost less than homeowners policies because they generally don’t include liability, or contents or cover theft of personal property on incidents such as water damage. Additionally, they are written as Actual Cash Value (ACV) policies rather than replacement cost coverage.

Make sure contractors hired to do the work not only hold a current license but also carry liability and worker’s compensation policies of their own. And, advises Harrelson, “Once work’s completed, be sure to replace the builders risk policy with a traditional homeowners or business owners insurance policy.”

Second home? Vacation home? Lake house? Protect your home away from home this winter with these simple winterizing tips.

Coverage and discounts are subject to qualifications and policy terms and may vary by situation. © 2016 Texas Farm Bureau Insurance