All Forum Posts by: Derek Lacy

Jonathan Arcay It’s called reimbursable depreciation. It is payable only to the named insured on the policy. Once that named insured sells their interest it’s no longer payable. Insurance is non-transferable.

My 2 cents. If the deal doesn’t have enough room for proper risk mitigation then it’s not a good deal. 

I see this mistake often from starting investors. They focus on insurance costs and not total cost of risk, of which insurance costs are only one part. 

How much will it kill your margin to have the roof ripped off and water damage throughout?  

Don’t like hurricane risk?  You can always invest in Phoenix, insurance costs are negligible there. 

Consider anything within 1 county as coastal. Deland to the East and Dade City to the West are considered coastal. 

Winds are significantly stronger in coastal than inland. 

That’s why the pricing is so much more 10 miles or less could be completely devastated by a direct hit. 

@Michael Norris

4 off the top of my head. 

1.  Host liquor liability. A known or unknown bottle of alcohol is on premise, consumed by the transient guest. Drives a car and injures someone.

2. Sexual assault. A neighbor is assisted by the transient guest or the transient guest is assaulted by the neighbor (or stranger). 

3.  Off premise liability. You have a beach front VRBO condo and the guest is injured on the beach. Or takes a bicycle furnished for their use.  Or you leave a pamphlet about local restaurants and they get food poisoned. 

4.  Your janitorial subcontractor uses a cleaner that causes the tub to be too slippery, they fall and hit their head. 

The issue is will a personal policy step up on those issues. On a LTR with a proper lease #1, 2 and 4 are of no concern as the law would see a difference between an annual lease vs STR.

Number 3 either would not happen (you don’t leave bikes for LTR’s) or again has a different level of duty. 

It comes down to on a STR you have the duty to protect the guest. On a LTR probably just the duty to warn of potential issues.

BHHC tends to be good on the under 20 student rental market. They are a subsidiary of Berkshire Hathaway.

Christina L. Foremost is a poor fit for STR. While they state they do it, many coverage gaps that you won’t find on the specialty policies. Proper Insurance has a decent form, but it covers your exposure. There are a few others out there too. Really Foremost just took a LTR policy and said it works for STR too. But you don’t have a lease and a bajillion landlord/tenant laws that apply on a STR. Leaving you exposed more like a motel than a landlord. Does it cost double, maybe. But a denied claim will cost more.

Correct. HO3 is ineligible for non-owner occupied. DP3 is for rentals or owner-occupied.

Keith Linne Encompass will issue/cancel upon inspection that it is a student rental in most cases. Not saying this to be a downer. But as a precaution to you. 1. If they ask the question, is this student housing, answer truthfully. If you don’t, they can void the policy post-claim. Which is not ideal. 2. If they inspect and cancel (they have the perfect right to do in the first 60 days), then your stuck with your second best option, so make sure it cash flows even at those numbers. But any large student housing owner is not using their home/ auto carrier to protect their butt. Find a commercial independent broker, they’ll get you on the right track. As for us, we don’t even play in student rental coverage until about $30-50k in premium which is about 20 houses min. So none of the above advice is to induce you to contact me, but to caution your plan.

Coastal or central? Who did you have quote it? My suggestion. Call Eric Shaw at www.shawinsures.com. He’s great for FL risks. Personally I’d never go without coverage for the largest risk you face.

Any property could be elevated out of a flood zone. That’s why coastal Carolina, all new builds are on stilts about 23’ above grade. Nothing new. In fact, NFIP requires elevation certificates on most properties in the highest of hazards. No FEMA maps are not horribly out-dated. They are revised very regularly. Lloyd’s is not offering based on being more efficient. They are buying market share. Something that happens frequently in insurance. Once they have what they want, they will raise rates. Feel lucky that $4,000 is it on flood insurance. Here in Florida a coastal $500,000 home can easily be $30-50k a year.