All Forum Posts by: Derek Lacy

I’m going to agree with the attorney and against the other insurance agents. Adding the LLC as an additional insured (AI) is insufficient on standard policy forms. The standard AI endorsement for owners reads it covers the AI for “your” acts or omissions. Who is “your” is the named insured. So if Derek Lacy commits and act or omission, Lacy Properties, LLC would be covered under the AI form. But if Lacy Properties, LLC commits the act or omission.... no coverage. The Named Insured on the policy must match the deed holder name for proper coverage. The AI form used for this review is the ISO CG2010 04/13.

Kelly Byrd If all things were known and disclosed to the underwriter, there should be no change in rate. What I find is less experienced brokers don’t understand everything in a commercial policy. So they could not know if the quote is exact or not. We don’t see those price changes after binding, but we ask and understand all the questions upfront. And don’t accept, not sure as an answer.

I am astounded at the plethora of absolutely wrong answers. But it explains why many investors are flippant in their product quality issues. The law that applies in this situation is the statute of repose. In Texas, unless changed in the last legislative session, it is 6 years. Being a 2006 build you would have until 2012 to discover the defect. But warranty periods, who owns the property, etc. have little to do with the issue. As time has expired, you bought this house as-is, and your insurance has a iron-clad trial-tested exclusion. Time to be an investor and invest another $20,000. Or, if that is in-fact a competitive price for repair, take it off your selling price, as you will certainly need to disclose this known and publicly discussed defect.

Edward B. Good point on obfuscation vs avoids. Also adding the LLC as additional insured is not effective, as the policy reads that the additional insured is only covered for the acts of the “named insured.” Meaning if John Doe was the named insured and original title holder, then signs the title over to Doe,LLC, but only adds Doe LLC as an AI not a named insured. Then a liability claim happens and Doe,LLC was negligent... John Doe’s Policy listing Doe,LLC would not defend or pay damages as John Doe was not negligent in the claim. And since John Doe was not party, the additional insured does not respond. Then on the other side, place burns down and the named insured is John Doe, additional insureds don’t apply to property losses (only liability). Claim denied, no insurable interest of the policyholder (the LLC owns it, not John Doe) Truly mind boggling the bad law and insurance advice given on this forum. There is no free lunch.

State minimum Property Damage on auto insurance is $25,000, in AL. Same in SD. Given the amount of coverage you say you have on the property, I have to assume you have an actual cash value policy. Or an underinsured replacement cost policy. Be prepared to pay your deductible and about 20-30% of the claim as actual cash value means you cannot recover depreciation. Or underinsured means a significant cut to the payout. Obviously I don’t know the property or the policy, but that would be my advice on preparations.

Tell him thank you for the good advice as a mortgagee has no premise liability.

Yeah. Go to healthcare.gov. There is no significant issue with those policies, but like all things in life, cheaper is not always better. One way they save money on the cheap plans is to have a “narrow network” meaning very few Dr’s. But you will find that the medium cost plans will have regular networks. Just remember HMO means you always need a referral. PPO means you have to pick from their list of Dr’s. Most people prefer a PPO if affordable. My advice. Find one that is HSA eligible. You get to use tax free money for medical expenses with an HSA. But you must purchase an HSA eligible health plan to do so. Then almost any bank can do the HSA portion.

I absolutely second Jason. In fact, I send a quote with the price blacked out, if that happens. When I get the inevitable phone call, I just say I thought price wasn’t important. Okay, I did that 5-10 years ago. Now I just decline and move on to a customer that I can develop trust with.

Steve Fitzgerald The rule for insurance is it always cost too much when you don’t use it. And never pays as much as you think it should when you do. So, biggest issue when buying, is it on special form. That is the form that many will call “all-risk.” It’s not all-risk, but it’s the most without endorsing more coverage. So do you need backup coverage, depends; will that claim ever occur. If it does, and you didn’t want to pay the full amount, probably should have bought the coverage. I’d highly recommend guaranteed replacement cost for the valuation. I keep getting told that costs too much, but I would affirm, if the loss of cash flow to properly finance the risk of your endeavors is too high, then it’s probably not a good deal, and look for a better deal.

@John M.

Nope. But I just gave generic advice. 

Pricing and which insurers will change a lot between Jersey and Florida, but coverage needs don’t. 

You still need cover if a Sandy heads your way, and we need cover if it freezes (not likely, but devastating if it did).  

No matter what, make sure it’s a “special form” policy. That would be known to any insurance expert reading “vacancy clause removed” but given 80% of insurance agents should not be in the business, I should not assume. 

Special form includes theft. Your most frequent claim will always be theft (copper, HVAC, etc) as a wholesaler. Special also picks up water damage and weight of ice and snow, which would be more important there vs here.