[{"data":1,"prerenderedAt":50},["ShallowReactive",2],{"faq-insurance-requirements":3},{"id":4,"title":5,"authorSlug":6,"body":7,"description":14,"extension":15,"heading":16,"intro":17,"items":18,"loanType":43,"meta":44,"navigation":45,"path":46,"seo":47,"stem":48,"__hash__":49},"faqs\u002Ffaqs\u002Finsurance-requirements.md","Insurance Requirements for Hard Money Loans | Builder's Risk, Liability & Coverage","tim-mushen",{"type":8,"value":9,"toc":10},"minimark",[],{"title":11,"searchDepth":12,"depth":12,"links":13},"",2,[],"FAQ on insurance requirements for hard money loans. Learn about builder's risk, liability coverage, and what lenders require before funding your project.","md","What Borrowers Need to Know About Insurance on a Hard Money Loan","Every hard money lender requires proof of insurance before funding a loan, and the type of coverage depends on the project. Here are the most common insurance questions borrowers ask before closing with Veristone Capital.",[19,22,25,28,31,34,37,40],{"question":20,"answer":21},"What insurance does a hard money lender require?","At a minimum, you need a hazard or property insurance policy that names the lender as a loss payee or additional insured. For rehab and construction projects, a builder's risk policy is typically required instead of a standard homeowner's policy. Depending on the project scope, general liability coverage may also be required.",{"question":23,"answer":24},"What is builder's risk insurance?","Builder's risk insurance covers damage to a property while it is under construction or renovation. It protects against fire, theft, vandalism, wind damage, and certain weather events during the project period. Standard homeowner's insurance does not cover properties under active construction, which is why lenders require a builder's risk policy on rehab and new build projects.",{"question":26,"answer":27},"Do I need general liability insurance for my project?","If you or your contractor will have workers on site, general liability insurance is strongly recommended and often required. It covers third-party bodily injury and property damage claims that happen during the project. Many hard money lenders, including Veristone Capital, require a minimum general liability policy for any project involving significant construction activity.",{"question":29,"answer":30},"When does insurance need to be in place?","Insurance must be in place and verified before your loan funds. Your escrow or title company will collect the insurance certificate as part of the closing package. If the policy is not confirmed before closing, funding will be delayed. Get your insurance quotes early in the process so this does not become a bottleneck.",{"question":32,"answer":33},"How much coverage do I need on a hard money loan?","The coverage amount must be at least equal to the loan amount or the replacement cost of the improvements, whichever is greater. Veristone Capital reviews the coverage limits as part of the loan closing checklist. If the coverage is too low, you will be asked to increase it before the loan funds.",{"question":35,"answer":36},"Does my contractor need their own insurance?","Yes. Any licensed contractor working on your project should carry their own general liability insurance and workers' compensation coverage. Veristone Capital may ask for proof of your contractor's insurance as a condition of funding, especially on larger rehab and ground-up construction loans. Never hire a contractor who cannot provide a current certificate of insurance.",{"question":38,"answer":39},"What happens if I have an insurance claim during the project?","If there is a covered loss during your project, the insurance company will typically issue the claim check to both you and the lender. The lender has to sign off on how the funds are used, and in most cases, the money is applied toward repairing the damage so the project can continue. Communicate with your lender immediately if something happens on site.",{"question":41,"answer":42},"How much does insurance cost on a rehab or construction project?","Builder's risk insurance on a typical fix-and-flip project runs between $1,500 and $4,000 for a 12-month policy, depending on the property value and scope of work. General liability policies for small investors usually start around $500 to $1,500 per year. These are project costs you should factor into your budget before closing.","insurance-requirements",{},true,"\u002Ffaqs\u002Finsurance-requirements",{"title":5,"description":14},"faqs\u002Finsurance-requirements","3cS1VewJTrVndaDFIuIpMLk2YTYLN7g5GwzEeUmHVpo",1792596708822]