Top Risks of Skipping Fix and Flip Insurance

Nate Jones, CPCU, ARM, CLCS, AU
1 day ago
2 min read

Investors buying properties to rehab and resell often focus on renovation costs, timelines, and profits—but one critical element is sometimes overlooked: insurance coverage.

Skipping fix and flip insurance may save a few hundred dollars in premiums upfront, but it exposes your investment to significant financial risks.

At Wexford Insurance, we help property owners nationwide secure fix and flip insurance that protects both the property and the investor.

1. Property Damage During Renovations

Without fix and flip insurance, you bear the full cost of damage caused by:

Fire or smoke
Water leaks or plumbing failures
Storms, wind, or hail
Structural accidents during construction

According to the Insurance Information Institute, construction sites and partially renovated properties are highly vulnerable to property damage.

2. Theft of Materials and Tools

Construction materials, appliances, and tools are valuable—and often targeted by thieves. Without insurance:

Replacement costs come out of pocket
Delays in your renovation schedule may occur
Theft may lead to project budget overruns

Fix and flip insurance typically covers onsite and in-transit materials, ensuring your investment stays protected.

3. Liability for Injuries

Renovations come with risk of injury to:

Contractors or subcontractors
Workers on site
Visitors or potential buyers

Without liability coverage, you could be responsible for medical bills, legal costs, and settlements—expenses that can quickly surpass the cost of insurance.

4. Coverage Gaps With Lenders

Most lenders—especially hard money or private lenders—require proof of insurance before releasing funds. Skipping fix and flip insurance can:

Delay your closing
Put your loan at risk
Cause lenders to demand immediate coverage before you can start work

5. Loss of Investment Due to Delays

Without insurance, even minor incidents can escalate:

Water or fire damage may halt construction
Theft or vandalism can delay project completion
Losses can reduce profit margins or lead to a total financial loss

Optional endorsements like soft costs coverage or delay in completion insurance can mitigate these risks.

How Wexford Insurance Protects Fix and Flip Investors

At Wexford Insurance, we help investors avoid the costly risks of skipping coverage by providing customized fix and flip insurance, including: