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Updated over 7 years ago on . Most recent reply

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Melissa Gittens
  • Real Estate Broker
  • Windsor, CT
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Reasons Why Insurance Companies Won't Insure a Property

Melissa Gittens
  • Real Estate Broker
  • Windsor, CT
Posted

What are some of the main reasons why insurance companies would not want to insure an investment property or would insure for a higher premium?

Most Popular Reply

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John Mocker#1 Insurance Contributor
  • Insurance Agent
  • Norwalk, CT
1,205
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John Mocker#1 Insurance Contributor
  • Insurance Agent
  • Norwalk, CT
Replied

Melissa,

Here's is some general info that I sent to a new client who was looking for properties. It may be helpful.

The things to watch out for/avoid from an Insurance perspective are:

1. Homes with Underground tanks (in use or not)

2. Homes with Lead Paint

3. Homes with Knob & Tube or Aluminum Wiring (even if you can't see it in basement or attic have your electrician check to see if it's still in the walls)

4. Homes with Fuses or less than 100 amp service

5. Homes with Flat Roofs

6. Homes with Pools that are not fenced or that have diving boards or slides

7. Homes with prior losses (they will show up under a CLUE report of the prior claims).

   May not be a problem if the issue was addressed or if it was from a "Catastrophic" loss

   such as a hurricane

8. Homes with EFIS (type of spray on siding) or Asbestos shingles or siding

9. Homes with Polybutylene Plumbing

10. Student rental:  If you are renting to students you may have a problem getting coverage.

Other factors that will impact the rates:

1. Age (newer construction will often get rate credits)

2. Renovation of Systems

     - Heating

     - Plumbing

     - Electrical

     - Roof

Complete updates are better but partial updates help. Within 20 years.

3. Distance to the coast (closer to the water the less options I have)

    - over a mile is normally not a problem

    - under 1500 ft can be a problem

4. Alarms: Central Station monitored alarms will give credits

5. Animals:  For either you or for your the tenants, certain breeds of dogs will cause the

                    companies to not write you Any bite history for any type of dog will also

                    cause them to decline.

6. Other factors that lead to credits with some companies

     - Insurance Score (based on info from your credit report)

     - prior insurance (how long you were with a company)

     - education level

     - other insurance with the company (auto, life, boat, etc.)

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