All Forum Posts by: Francine Melia

Hi Chris,

Yes, you're correct that, to protect the physical dwelling and anything pertaining to the ownership of the property, a commercial policy would be the best fit as the commercial renters policy is not designed to protect that (it protects the renters' interests at the location like contents, liability, files and records, etc.) depending on the individual coverages therein. In property insurance, it's all about the usage of the property when determining which policies are the right fit (short-term habitational rentals, long-term habitational rentals, vacation habitational rentals, commercial rentals, etc.). In your case, this will be a mixed use property, so you should chat with a commercial agent to assist you in finding the best policy fit that will cover both the habitational and commercial usages.

If you'd like, I'm happy to refer you to a commercial specialist in my network to talk over all the details as every property is different -- feel free to DM me.

Best of luck and take care,

Francine

CA Insurance License #4138783 (In case you're in CA)

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Disclaimer: The information provided in this post does not, and is not intended to, constitute specific insurance advice. Anyone reading this must contact a licensed insurance agent or company for guidance with respect to their specific insurance matter, and should NOT act or refrain from acting on the basis of information herein without first seeking the specific advice of a licensed insurance producer.

Hi Chris,

This is a great question around mixed use properties! If your current insurance agent (who is recommending the commercial policy) specializes in personal lines/residential policies, I would recommend talking to a commercial specialist and I'm happy to help further if you want to DM me.

Without knowing too many other details about this, in general, anything mixed use should either have individual policies for each unit OR a commercial package policy that can be customized to your specific usage percentages. In short, a residential policy isn't designed to protect any commercial spaces/uses, so your current policy would not apply to the commercial space, any liability claims that arise from it, etc. That means that this part of the building is not covered, and you can refer to your current policy, usually in the Exclusions section, as that should be described therein.

The policies/coverage that Robin is talking about sound like what he's requiring of his renters (renters insurance) and yes, I highly recommend your renters (residential and commercial) each carrying a renters insurance policy (the commercial tenant should get a COMMERCIAL renters policy, not a standard renters policy) to protect them, their contents in the unit, their liability, etc. At the very least, a liability policy for the commercial unit is helpful for claims made against the unit renter. BUT if a pipe bursts, the roof collapses, or a fire happens in that commercial unit, that's not really the place of the renters/liability policy to kick in -- it should be covered by the landlord policy as it's a loss on the physical property (which the renter does not have an insurable interest in); a residential policy would not cover the commercial unit, and that's the gap I'm seeing in the current setup regardless of who is named on said policy.

Best of luck and take care,

Francine

CA Insurance License #4138783 (In case you're in CA)

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Disclaimer: The information provided in this post does not, and is not intended to, constitute specific insurance advice. Anyone reading this must contact a licensed insurance agent or company for guidance with respect to their specific insurance matter, and should NOT act or refrain from acting on the basis of information herein without first seeking the specific advice of a licensed insurance producer.

Hi Adedayo,

Insurance is getting more challenging to place and the best carriers/providers that fit your unique situation totally depend on a lot of factors: age of the property, specific location, your claims history, the property specifics, and more. What you need is a solid agent (either an existing one or a new one) who can help you find a policy with the right coverage at the right price. This can be a captive agent at a particular carrier that does well in your area (like Nationwide, Allstate, Progressive, or any carrier with those cute animal mascots in the commercials who are advertising in your city), or a broker who can offer you a wider carrier search across multiple companies to look for the right fit.

I am the head of the insurance department at a great company; we are a fully-licensed agency and we work with some of the top carriers and agency partners in the US, so we can totally help you shop for a policy! DM me if you're interested in us as an option and I'll direct you on how we can get started on our search.

TL;DR: There's no one right fit for every property and situation, so a good insurance agent and agency is needed to get into the specifics with you and find the right fit. 

Best of luck on your insurance search!

Francine

I also concur with Greg: the first important step is to read your policy and determine what perils are included and excluded. Without seeing your specific policy, we can't know whether or not this situation is covered, but I can say that normal aging/wear and tear is excluded from many policies. You can also reach out to your insurance agent or broker to go over the details of the policy and coverages if you need help with the document.

With regard to your insurance carrier, if you reach out to them about a potential claim/for an inquiry, many record that as a claim even if the actual claim is never filed. This can raise the rates on this property as well as any other properties connected to your named insured/property ownership and the claim can stay on your history for 3-5 years or even longer (depending on which carrier is running your claims history as they can use different time measures). There is no general formula for how much the premium rates may rise, but it's common to see that increase as well as any year-over-year increases that happen regularly.

Once you know more about the coverages and exclusions in your policy, it's up to you to decide if you think it's a claim you'd like to make vs paying for it out-of-pocket. Some factors I recommend taking into account are: your deductible vs the projected cost of repairs, your time spent filing the claim and getting the repair and reimbursement if it is covered by your policy, and how much and how likely your rates are to go up if you make the claim.

Best of luck as you navigate this situation.

Francine