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If you are in the real estate business and do fix and flip on the side, one thing for sure is that you will need to have a good understanding of homeowner’s insurance in general and flood insurance in particular. This is imperative for those of you buying or selling houses prone to heavy rains. There are two types of flood insurance; government and private insurance. Government insurance is given by the National Flood Insurance Program or NFIP which comes under the National Emergency Management Agency or FEMA. Even if you were to buy flood insurance from a private company, FEMA decides who gets what, as far as compensation, regardless if it is a fix and flip or not.

As government insurance is concerned only communities that have agreed to be a part of the government agency will get NFIP coverage for their real estate.

• Plumbing and electrical system of the building or house
• The building and its foundation
• Appliances such as water heaters, HVAC’s, fridge, cooking stove and anything else that is built into the house
• Permanent as well as non-permanent carpeting
• Wall mounted air-conditioners, clothing and furniture
• Dishwashers, ovens, washers, and dryers

As far as dollar amounts are concerned the NFIP will give up to $125,000 for building-related damage and $100,000 for your possessions, such as the ones mentioned above. Some private insurance companies will take care of the “in between” stuff, such as paying for hotel and food while the house is being fixed. In fact, when looking at private insurance one of the main things to check out is see if they cover what the government doesn’t cover.


If you are planning on starting a fix/flip project soon, contact Center Street Lending to get more details on how a private lender can help you start and grow a house flipping business.