Insurance company harassing me

[Justin D Schwartz]

Hey guys,

I'm looking at buying a 4plex but I have a few concerns.

My last duplex I purchased back in January had an older roof, older water heater, and older AC system (air handler). The insurance company started giving me all sorts of grief and made me replace the water heaters, get a roof inspection and an AC inspection. do they really have the right to do this? 

To bring this back full circle, the 4plex I am looking at has older Air handling units and I'm worried if I purchase it the insurance company may make me replace them. Any advice? has anyone experienced this before? what did you do, or what would you do?

[BreAnn Stephenson]

Hi Justin!

Yes, it can be challenging for investors when it comes to insurance as many standard companies have stipulations on the age of many things, roofs being one of the most commonly scrutinized. As they are taking on the risk of protecting the property and reimbursing you if you have a loss, they do have a right to be sure that they have properly underwritten for the risk...meaning collecting the correct premium, correct deductibles, coverage options, etc.... Many standard companies require an up-front inspection, so it is very common.

That stated, there are investor-friendly companies out there that don't do up-front inspections as they have already accounted for writing coverage for properties that are sitting there fire-gutted to those that have just been fully remodeled.