insurance

[Robert D.]

I have several 11 rentals with state farm …and each rental has its own insurance policy. I have been recently quoted an insurance policy from American Family that would include all rentals on 1 insurance policy. The cost is ca. 30% less.

Here is what the state farm is telling me :

If someone slips and falls in one unit and exhausts your medical expenses, then yes they’d sue you and the liability would kick in. Then you would be dropped by American Family and no other insurer would touch you at that point for any of your properties. But because you have them separated at State Farm it limits your exposure.

Bottom line is that with American Family’s policy, if something happens to one unit it’s going to affect all of your units because they’re priced together

Here is what American insurance is telling me

If your account needs to be separated in the future we can do this. But really, if it is one property or multiple properties the risk is always following the address of the individual policy. So even if they are on one policy or all on one, the same situation of frequency could occur.

To tell you the truth I imagine we work exactly the same as State Farm, any claim or frequency of claims will certainly effect how the risk is rated or written.

In my experience, it’s not the dollar amount of the claim, but the number of claims that is more of a concern. I think this is an underwriting guideline across the board with how insurance companies write policies.

To help, answer your questions and help you make final decisions. One policy or 11 policies, the claim is still paid. Underwriting at renewal would always take place once a claim is closed. If we write you today with 11 properties on 1 policy, we can always rewrite with 11 separate policies in the future.

Assuming the policies are apples to apples and the same risks are covered – would you go with a 1 insurance policy for all rentals or keep them separate ? I have created 1 land trust per 2 properties and beneficiary interests of those trusts are assigned to an LLC that I co-own with family member. I am just trying to understand which option is better as far as insurance