Uninsurable house

[Thomas DeMoss]

Ok, I got a call the other day from a friend with a sfh she is trying to sell. Currently rents for $975/month and is 3/2 that has been rehab'd. She has several properties and has had multiple insurance claims recently which has caused her to be black flagged by all insurance companies. The bank which holds the mortgage on the house can insure her but will cost almost $2000/year.
She has tried to sell the house with a realtor with no luck. She put to much into the house and it will not sell for what she needs to pay off loans. Any suggestions?

[David Krulac]

Some insurance co have a 3 strikes you're out policy. Most will check the CLUE database. An insurance claim by your TENANT (you require tenant insurance don't you) will be a black mark against the property and YOU as the owner. Ask me how I found this out?

Insurance is best used to cover catastrophic events not nickel and dime stuff. There was a person that were trying to sell their house ad had had 3 insurance claims. A new owner would be stuck with this black mark and 1 buyer was turned down by his insurance company and therefore could not buy the house. Most Realtor contract have a clause about insurability, which cna be an issue today.

Some investors have high deductibles of $1,000 or $2,000, I've even heard of $5,000. that way you don't file the small claims and only big high dollar claims. Have also heard of owners who don't file a claim at all even if entitled to file, because they don't want to lose their insurance all together.