The Complete Insurance Guide for BRRRR Real Estate Investors
The BRRRR strategy — Buy, Rehab, Rent, Refinance, Repeat — has become one of the most popular methods for building a real estate portfolio. But many investors overlook a critical component: insurance that adapts to each stage of the process.
Why Standard Insurance Doesn't Work for BRRRR
Traditional homeowner's insurance is designed for owner-occupied properties. It doesn't account for:
- Vacant properties during acquisition and rehab
- Construction and renovation risks
- Tenant occupancy and landlord liability
- Multiple properties under different ownership structures
- Lender requirements during refinancing
Each stage of BRRRR requires different coverage. Using the wrong policy — or having gaps between policies — can leave you exposed to significant financial risk.
Stage 1: Buy - Acquisition Coverage
When you close on a distressed property, you need coverage immediately. The property is likely vacant and may have existing issues.
What You Need
Vacant Property Insurance
- Covers properties without occupants
- Protects against vandalism, theft, and weather
- Liability coverage for anyone entering the property
- No occupancy requirements
Common Mistakes
❌ Assuming the seller's insurance transfers to you
Pro Tip
Get your vacant property policy bound before closing. Many investors include insurance costs in their acquisition analysis.
Stage 2: Rehab - Builder's Risk Coverage
During renovation, your property faces unique risks. Materials are on site, contractors are coming and going, and the property is vulnerable.
What You Need
Builder's Risk Insurance
- Covers the structure during construction
- Theft of materials and supplies
- Damage during renovation work
- Contractor liability (or require contractors to carry their own)
Key Considerations
- Policy term should match your rehab timeline
- Coverage amount should include projected improvements
- Verify contractor insurance requirements
Coverage Gaps to Avoid
Many builder's risk policies have exclusions for:
- Theft of unsecured materials
- Damage from faulty workmanship
- Foundation work
- Existing structure damage
Read your policy carefully and ask about these common exclusions.
Stage 3: Rent - Landlord Coverage
Once your property is renovated and tenants are in place, you transition to landlord insurance (also called rental dwelling coverage or DP3).
What You Need
Rental Dwelling Policy (DP3)
- Property damage protection
- Liability coverage for tenant injuries
- Loss of rental income (fair rental value)
- Personal property coverage for appliances
Liability Considerations
- Slip and fall accidents
- Negligent maintenance claims
- Tenant disputes
- Dog bite liability (if you allow pets)
Important Coverage Options
Loss of Rental Income: If a covered event makes the property uninhabitable, this coverage replaces your rental income during repairs.
Landlord Contents: Covers appliances, landscaping equipment, and other items you provide.
Stage 4: Refinance - Lender Requirements
When you refinance to pull your capital out, lenders have specific insurance requirements. Missing these can delay your closing.
Typical Lender Requirements
- Proof of insurance with lender as mortgagee
- Minimum coverage amount (usually replacement cost)
- Specific endorsements or policy types
- Insurance declaration page
- Proof of premium payment
How We Help
We're familiar with lender requirements and can provide compliant documentation quickly. We work with DSCR lenders, traditional banks, credit unions, and hard money lenders.
Stage 5: Repeat - Portfolio Coverage
As you scale, managing individual policies becomes cumbersome. Portfolio coverage simplifies administration and often reduces costs.
Portfolio Policy Benefits
- One policy for all your properties
- Blanket coverage that moves between properties
- Simplified administration with single renewals
- Volume pricing as your portfolio grows
- Consistent coverage across all holdings
When to Consider Portfolio Coverage
Most investors benefit from portfolio policies when they have 5+ properties. The administrative savings and volume pricing make it worthwhile.
Umbrella Liability
As your portfolio grows, so does your liability exposure. An umbrella policy provides an extra layer of protection:
- Additional $1M-$10M+ in liability coverage
- Covers all properties under one policy
- Protection against catastrophic claims
- Relatively affordable per million of coverage
Insurance Costs in Your BRRRR Analysis
Smart investors include insurance in their deal analysis from day one.
Typical Costs
| Stage | Coverage Type | Monthly Cost (Estimate) |
Costs vary significantly based on location, property value, and coverage limits.
Including Insurance in Your Numbers
When analyzing a BRRRR deal, include:
- Vacant/rehab insurance during hold period
- Annual landlord insurance in operating expenses
- Umbrella policy costs allocated per property
This ensures your projected returns are realistic and accounts for true operating costs.
Working with an Investor-Focused Agent
Not all insurance agents understand BRRRR investing. Working with a specialist means:
✅ Seamless transitions between coverage stages
Next Steps
Ready to protect your BRRRR investments with proper coverage?
1. Get a free quote for your current properties 2. Tell us about your investment strategy 3. We'll create a coverage plan that grows with your portfolio
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Questions about BRRRR insurance? Contact us — we specialize in coverage for real estate investors.