Property Keeps Getting Dropped by Insurance - Is it a Lemon?

Question

One property in my portfolio is about to be dropped from insurance for the 2nd time in about 3 months - with no chance given for appeal or remedy.   First from Travelers/GEICO and now from US Standard Insurance Company.  Has anyone else dealt with this?

I purchased the property for $56k in April.  It is in good shape, rented to pilots, but is in a marginal area (East Point) on a good block - one block from MARTA and 1-2 blocks from Tyler Perry's new studio.  The first time, Traveler's sent an inspector who submitted a list of  ridiculousness such as claiming I was living in the property though it is on a landlord policy (this is ridiculous b/c they insure my primary residence).  They sent me a notice of cancellation and I found new coverage through US Standard Insurance at the recommendation of my realtor.

Fast forward a couple of months and I get a letter saying USI is terminating my policy in September due to "unauthorized" siding material...but the house has standard vinyl siding??  Are they seeing a risk with my property that I'm missing?

I'm now debating finding yet another insurance provider or self-insuring since we have the reserves to do that.  I will probably just find another insurer but am really annoyed with this process and wonder if I have any recourse if a company drops me for what appears to be unfair reasons?

Any input, advice, or recos on landlord friendly insurers in GA would be greatly appreciated.

Samantha Klein · Answer

If you have multiple rentals, getting a commercial policy may make sense. I know that it's cheaper combining them all. Take to @Jason Bott. He may be able to give you some guidance or have a product to offer.

Account Closed · Answer

@Ericka Grant It's a long shot, but the siding may be T111 which was defective and recalled years ago. I'd probably have an *old* siding contractor who has been around for a while, look it over and tell me about any issues he can see. Another thing, once a house gets into the Insurance Database as a *problem* house, it is an uphill battle. If the house had a serious claim (fire, flooding, siding, whatever) the industry never forgets. So, never file a claim unless it is well over your deductible.

Samantha Klein · Answer

@Ericka Grant You really need an investment savvy insurance company for multiple properties. You should be able to find one that will cover all properties under one policy.

Rick Baggenstoss · Answer

@Ericka Grant You have to place your 'borderline' properties with companies who want to grow in Georgia.  Some of the companies you mentioned may be manufacturing excuses because it's a market where they have too much exposure already.  Try American Family or REI Guard.  If this is a short-term rental, then try Proper Insure.

Matthew Hite · Answer

I've used SES Insurance Brokerage Services in the past, which to my understanding is based out of California.  To my knowledge they do not perform any inspections on the properties and have very reasonable insurance rates.  However, I have not had to file any claims (luckily) so am not certain as to their level of customer service.

John Mocker · Answer

Erika,

You need to get your agent to work on this.   I've seen problems if the siding was Asbestos but not with Vinyl.   They should speak to the company and get a copy of the inspection report.   From that report they should be able to determine what is wrong.  Often there are photos in the report.   Casey could very well be correct that they looked at the wrong property and the photos may prove that.

Casey J Burkhead · Answer

Hi Ericka,Would there be a chance that there is some kind of confusion with the address of the property?  That would be my initial thought.  Like the first inspector went to the wrong property and spoke to someone who actually owned it.  And the second went to the wrong property that did have unauthorized siding?  It wouldn't be the first time that inspectors have gone to the wrong property.  I once had a bad inspection report for one of my clients and when I reviewed the pictures, it was the wrong house.  The USI inspector definitely would have submitted pictures.  Maybe you can request to see them to verify it's the correct property?

Ericka G. · Answer

@Casey J Burkhead

@John Mocker

Account Closed

Thanks for the input.  I will call and try to get a copy of the report from USI.  Looking back at my purchase inspection report, he did indicate that there may be asbestos siding UNDER the vinyl siding as the house was built in the 1950s and that was common siding back then.  I have another property with that same situation that had no problem getting insured, however.

For Traveler's/GEICO, I met the inspector at the house myself so I know she was in the right place and that is what is so odd about the assertion that I live there...I feel like they just decided to dump me for whatever reason.  They also sent a letter canceling a policy on an immaculate triplex I own due to branches overhanging the roof.  Sucks because we have 2 cars, an umbrella policy, and multiple properties insured with them and I was really happy with them until now.

Time to shop for another partner, I guess.  I just hope the properties haven't been black-balled for some reason.  No previous claims on either property that I'm aware of.

Jason Bott · Answer

@Ericka Grant the lowest cost commercial umbrella policies (starting @ $350) have a 25 unit limit.  The more traditional Umbrellas limits are in the thousands.

Ericka G. · Answer

@Samantha Klein I agree about the umbrella policy, GEICO said they would only allow 4 properties on the umbrella policy however.  How many are you able to have on yours or do you have multiple umbrella policies?

Property Keeps Getting Dropped by Insurance - Is it a Lemon?

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