All Forum Posts by: Aaron Porter

Everyone here is pretty spot on!  contact your insurance provider and get the process started.  The insurance company has attorneys and they will fight for you.  

Moving forward from this incident. It may be a good idea for you to put systems in place so that these types of incidents wont happen again.  Things like amending your tenant lease. Doing regular checkups on the property including regular walk-throughs and drive-byes, etc.  Maintaining a good relationship with your tenants so that there can be good communication between you. Making sure that you require all of you tenants to get and keep renters insurance. It is cheap between $12-$35 a month and renters insurance includes liability coverage that would cover the tenant for things like this, not to mention covers you the landlord for things that the tenant is liable for like destroying your property)  

While you shouldn't be held liable for your tenants actions we live in an extremely litigious country and in most cases you the landlord are viewed as the person with enough to lose that it is worth going after you instead of the tenant. 

Monies received as a payout from insurance is not normally deemed as income.  It is a benefit, not income and therefore not taxable by the IRS.  

You are correct that the loss of rents coverage is  most likely taxable but if you work with a good tax accountant or a tax attorney they can help to navigate the deductions that you can take from the loss of rents payout to lower your tax liability.  

Work with your accountant or find a good accountant who is familiar with what you need as a real estate investor and who is in line with what you want to achieve both this year and for years to come. (tax planning/strategy)

Umbrella policies can be utilized regardless if the property is owned by a LLC or not.
Also side note for umbrellas is that they can also be used to cover your auto and primary home which gives you huge value should you have a liability claim in your home or get into an accident where there are injuries (especially when the accident involve someone who is uninsured or underinsured.  

The average cost of an auto accident with a minor injury is $80K and if there is a fatality it can go over $2,000,000.  

most states minimum auto insurance levels are 25K/50K.   

the same usually goes for toxic materials cleanup.  Asbestos, Lead paint, nuclear, etc are not usually covered.  Most policies usually have very specific wording as to excluding hazardous materials.

@Preeti Tibrewala  I will send you a message.  

 I have been in the automotive industry for most of my life and I can tell you with 100% certainty that there are more dishonest mechanics costing you thousands of dollars in unneeded vehicle maintenance and repairs (especially from the "Dealers") than insurance salesmen are costing you in misrepresented life insurance.    

But to each his own, I am not in any way trying to sell you something that you clearly don't want.  I don't sell anything to anyone that they don't want and don't need or wont benefit from.  but hey maybe I am the only one.  

Side not of ethicalness, if your insurance agent did something unethical report them to the state insurance board, and sue them.  every agent/ agency has to carry Errors and Omissions insurance.  If the agent screws up that much they aren't going to be an insurance agent for very long. 

I have had a few clients be required by their bank to setup funded by sell agreements and key person life insurance policies in the last year.

about 15 years ago my father-in-law was required by his bank to get life insurance before they would fund the next portion of his development.  Life insurance used in this way creates an extra safety net for banks.  They see that regardless of what happens to the owner of the business the finances will stay stable.  

The death of a founding entrepreneur wipes out on average 60% of a firm’s sales and cuts jobs by roughly 17%. on top of that, these companies have a 20% lower survival rate during the two years after the founder’s death compared to similar firms where the entrepreneur is still alive.

According to a study done by State Farm and the Insurance Information Institute the average cost of a dog related injury claim is $49,000.  Yes that is just shy of $50K.  

State Farm recommends tenants have at least $100K in liability coverage but to adjust that value up if you regularly host people at the house, or have things like pools, dogs, basketball hoops, etc.  As a landlord I don't know if you are allowed to require a specific amount of liability coverage but you can require the tenant to carry renters insurance. 

This whole thread has turned into a he said she said batch of attacks.  From my perspective everyone gets paid on commissions.  

You do work, you get paid.  The amount of work that you do dictates the amount of payment you receive in commissions.  The Financial advisors you are referring to as having been educated all get paid commissions, the day traders get bonuses based on how much money they are able to bring into their perspective firms every year, they make somewhere between 1-2% of a clients total book and they get paid for every trade that they make "for their client"  for the life time that the client remains with them.  Lenders get paid commissions based on the loans that they sell.  The mechanic that fixes your vehicle gets paid commission for the "fix" that gets you back on the road when your car breaks down.  

Lets all stop acting like no one should get paid to do a good job.  Cash Value life insurance has a place, just like a Roth has a place, Just like buying stocks, bonds, and notes.  They all have and do similar things just a little bit differently with varying degrees of risk.  

Personally I like insurance. but that doesn't mean that I don't have and use other types of investments.  Think of the old adage "Don't put all your eggs in one basket"

Yes Get a quote for Insurance.  Highly secluded in California forests.  I have a feeling this is going to be an extremely expensive home to insure and you may not be able to get fire insurance. 

That being said it looks like a beautiful home and would be an amazing place to venture to.  Best of luck on the deal!