What does insurance actually look like when you're living in a gut job?

Builder's risk is normally for a structure nobody's living in yet. Once you're occupying it, most carriers want a homeowners policy with a renovation endorsement instead, and some will only write it if the house has working heat and water. The one that catches people is the vacancy clause, which can kill coverage if you leave the place empty for 30 or 60 days mid-project.

My question every time I read these threads is who pays for the hotel when the bathroom is out for three weeks. Does any of this cover that?

@marlow loss of use coverage usually only kicks in after a covered loss, not because you tore the bathroom out yourself. Voluntary construction isn't a claim.

@beacon on the licensing half, in most states you can pull an owner-builder permit for work on your own residence, and the trades still have to be licensed for electrical and gas in a lot of jurisdictions. It varies by state and sometimes by city, so the permit counter is the only real answer. Owner-builder also usually means you carry the liability for the work when you sell it.

Add the numbers people forget. Permit fees on a full interior remodel commonly run several hundred to a few thousand depending on the jurisdiction and whether they price off project value. Dumpsters, 500 to 800 a pull in a lot of markets. A temporary storage unit while you shuffle rooms, 150 a month. None of that shows up in the purchase-plus-renovation figure people quote.

On software, honestly a spreadsheet does it for one house. People pay for the contractor platforms because they're managing crews across jobs, and those run well over a hundred a month. For a live-in flip your real tools are a receipt scanner and a folder that never gets deleted, because basis is what you'll be proving at sale.

@lantern is right that it's state by state, and I'd add that unpermitted work is the thing that follows you. If you do a bathroom without a permit and the buyer's inspector finds it, in most states you're into disclosure territory and possibly a retroactive permit, which can mean opening walls you already closed.

Do lenders care what policy you're on? Feels like they'd have an opinion if their collateral has no kitchen.

@sable they do. The loan requires you to keep the property insured and to notify them of material changes, and a renovation loan will often require specific coverage during the work with the lender named. Whether anyone actually checks mid-project is a different matter, but the obligation is in the note.

The 30 to 60 day vacancy thing @bramble mentioned is worth reading in your own policy language. Mine defines vacant differently from unoccupied and the difference is whether your furniture is there.

I'd also ask about liability for anyone helping you. If a friend falls off a ladder in your half-finished stairwell, your homeowners liability may respond, and if you paid him anything at all the carrier may argue he was an uninsured worker. Cash to a buddy for a weekend of drywall is the exact fact pattern insurers push back on. Getting the actual policy language read by someone who does this for a living is cheaper than finding out.

I figured the answer would be one policy name and it's turned out to be a policy, an endorsement, a permit rule that changes by state, and a lender clause. I'm going to go read a homeowners policy front to back and probably come back with more questions...