All Forum Posts by: Jason Bott

@Nayeem Khan my clients have had a few of these, but involving tenants.  They were not sued in those situations.

One thing you should confirm is if the contractor you were holding the contract with has work comp coverage.  In most states the work comp policy has a death benefit paid to spouse/children.  If he did not have coverage, family members have a light image claim with the contractor.  You could possibly be named in that suit.

@Atul Mathur

 The coverage your are describing is typically called "Betterments and Improvements".  I have many investors who have these, ranging from 1 - 145 in a complex.   Since the condo will usually cover the studs out, you just need to figure out how much to build out the space.  Market value does not have much of an impact.  BUT local contractor pricing and materials has everything to do with it. 

Ask a contractor you trust how much it would cost to build out the space with "Like and Kind" materials based on the sq/ft of the unit.  That should give you a pretty accurate value to place on the policy.

@Jean Paul Rousseau  many insurance companies do not like out of state or out of the country owners.  My out of country clients get around this by listing the local property management firm as the contact.

Also, commercial Policies do not require a SS #.  It sounds like you are dealing with a personal lines agent who will have limit options for you as you grow.

@Wesley W.  As a Real estate investor continues to grow, eventually they run into this issue.  99.9% chance you will not find a single insurance company who can do this at a competitive rate.  This is usually when investors find their way to an independent insurance broker to essentially take over the management of all your insurance policies.  This way you develop a relationship with 1 individual who spends the time quoting and blending all the coverage's into 1 cohesive program. 

Here are some basic guidelines to consider when trying to consolidate.

Personal "Umbrella" coverage is used to raise your liability limits beyond the point of the base policy on any asset in your personal name.  Example, if you have a home or auto with $300k of liability, the Umbrella policy will pickup @ $300,001 and extend up to a $1,000,000 or an additional $1,000,000 for a total of $1,300,000. 

Most personal umbrella will have a threshold for # or rental units, usually 4-10 total units.  To make it more difficult, they may limit those buildings to nothing bigger than a 4 unit.  Beyond the 4-10, they consider your rental portfolio to be commercial. 

Commercial Umbrellas start @ $1,000,000 and can go over the top of multiple different insurance carriers as long as they met the financial stability guidelines of the Umbrella company.  I have on client who we are writing the Umbrella over the top of 4 Farmers policies in IL, 1 State Farm in WI, 1 Auto Owners IL, and a Lloyds of London policy in FL.  I only represent 2 of the 4 companies. 

Hope this helps you. 

@Mel K.

 We have an office in FL, and even as a fellow insurance agent trying to get a favor done from a fellow agent for clients of mine, they still need this done.  So sorry to say, if inside the insurance biz I cant get by this red tape, you will even have a tougher time.

Good luck

@Alex SImon

 The term Umbrella is misused on BP 99% of the time.  Most people are referring to a policy that can handle multiple policies all at the same time, versus having a separate policy for each property.  So starting off, do not lead your conversation with Umbrella policies when getting insurance options. 

You will want to have a policy that at a minimum, gives you coverage for the Property coverage, General Liability coverage and loss of rents.   Most policies have these 3 main pieces to it.

There are many other 2nd tier coverage's such as back up of sewer, Building Law and Ordinance, etc. that you may want to consider.

 Lastly,  Keep in mind that the term "Landlord" or "Rental Property" policy are not names of policies that all insurance companies use. 

@Mark Bookhagenyou can get $1mil GL fro about $100-$150 per year.  That policy is prorated bill monthly, so figure $10-$13 per month.

@Nayeem Khan

 there is a local insurance program that combines both a vacant policy with a builders risk policy, avoiding the starting and stopping of multiple policies.  I will send you a PM.

@Matt Faix

 IF they have auto insurance, their policy will provide you coverage under the Property Damage section.  You can file direct with their insurance company if you can get the info from the police.

@Matt Flood

 Insurance rates can change quarterly within a particular insurance carrier, so when you may be factoring 20-30 companies, there is really no way to guesstimate an accurate #.  Now you can estimate to maybe 25% of the true cost by taking the first 2-3 quotes from your agent and figuring out what the rate per $100 is. 

For example, you have 3 properties, each @$100k in value.  Annual quotes are $350 ($.35rate), $400 ($.40 rate) and $440 ($.44 rate).   Add them together and divide and you will find the common rate is $0.3966 per $100 of value.  This will get you a guesstimate to work with.

Regarding the list of questions most companies want, each company has a few questions that are unique to them.  Example, any 2nd story balcony, flat roof, etc.  You just have to figure those out as you go.  The main questions everyone wants to know are property characteristics (age, sq/ft, age of roof, circuit breakers or fuses, etc) and occupancy (any students, section 8, assisted living, etc)