Insurance company threatening to cancel policy due to vacancy!

[Samantha Soto]

I bought my first rental property in May in Huntsville, Al, and now the insurance company (State Farm) is threatening to cancel our policy because the property has been vacant for over 30 days.  Is that normal?  What do other investors do when you have a vacancy period exceeding 30 days?  I am freaking out that our asset is uninsured now.  I feel like the insurance company blindsided me with this!  Any advice and recommendations are appreciated!

Thanks!

[Kevin Romines]

I write foremost policies for vacant and rehabs. They can go vacant up to 5 years no problem. To do a rehab, you still use the vacant policy but be sure to give the scope of work to your agent. Plan on doing the exterior work 1st as the main concern for Foremost is the shell of the home being secure from the elements and intrusion. As @Lynn McGeein mentioned, you can get vandalism coverage on this policy. You can also get liability and theft which you cant get on builders risk policies. Their minimum earned premium is $250.00 so plan on staying on that policy until that amount is used up. As for them waiving the rest of the unearned premium if you flip the policy over to a landlord policy with them, I'm not sure about that, but I bet they will do that? Its worth asking?

Also remember that they do not have limits on the numbers of properties they will insure for you and they will do properties owned by an entity (LLC / INC) as a personal line policy. There is a whole lot to like as far as investors are concerned.