All Forum Posts by: Jason Bott

 @Dave Carpenter is right about the differences between the 2 areas.  I live in Tosa and work downtown, so I drive up and down Vliet and North in the mornings and around 5.  The crowd walking the street in both of these neighborhoods tells the story.

@Douglass Belt I drive through that neighborhood daily.  If you insure @150k, have curcuit breakers and a decent roof, your premiums should be closer to $50-$60 per month.

@Darrell Lee

When a building has a total loss, the settlement payment is not the Replacement Cost, but the appraised value at the time of the loss.  There are variations to the way different insurance companies settle the claim, but they will never pay more than what the property is appraised for when if you are not rebuilding.  If you have a total loss 6 months from now, and will not rebuild, they will most likely pay you the acquisition price plus additional amount invested.

@Brian Karlow

 Regarding the insurance, are you looking for the cost during reno or as a buy and hold?  Both stages can have slightly different premiums.

Also, I see you own other singles.  If you have a master policy your premium rate per $100 of building value should be the same for this new one as the other 9 if they are all like and kind properties.  With multiple properties, you would not want to shop seperatly and miss the chance to leverage your current ones for a lower premium.

@Shawn West

 Welcome from Milwaukee!  You'll find many BP members from WI & IL all eager to share their knowledge and connections with you. 

@Iraj Kasimi

 In areas of the country where sever weather is common, the insurance companies with the best rates can change on a monthly basis.  You will want to seek out agents represent several companies and can give you a good feel for the marketplace.  If you get 5 quotes, 1 will be high, 1 will be low and 3 in the middle.

Also, most insurance companies who will write a 30 unit complex will not write small (4 units and under) properties, so don't make any assumptions on premiums based on small properties.

In this market, all insurance companies are really scrutinizing the age of the roof (older than 18 years can become an issue) and want to see circuit breakers for the electrical.  Fuses will drive up your premiums.

As far as the info they will want to see besides the name, address, etc.

Year built

Year of the last update to the roof, electric, plumbing and heating

Who are the renters?  Section 8, student, elderly, assisted living or market rate?

Any alarm system or fire suppression system will improve your premium

Good Luck

@Darrell Lee

In the insurance world, the players (insurance companies) for office space are completely different from ones who will write rental property.  You should be able to get some very competitive pricing from both the direct writers like State Farm and the independent agents, so check with both.

Regarding the ACV coverage, you will only be paid the depreciated value of the part of the building that was lost.  So with a 100 year old building, they will be able to argue a large depreciation percentage when paying your claim. Example, $100,000 fire loss, less 80% depreciation = $20,000 claim payment.  That being said, you may only get offers with an ACV option.

The other coverage you may want to put more focus on is call Building Law and Ordnance.  Claim example, you have a fire and all your door widths are not ADA compliant.   The city will require you to rebuild to the current code, but your insurance company will only replace what you lost, which was a noncompliant doorway.  If there is increased cost between the old doorway and the new ADA door, that cost is not covered unless you have the Building Law and Ord. coverage.  These older buildings can have all sorts of uncovered costs to bring them up to code.

@Ronnie Sparrow

The fact of the matter is, no agent has access to all of the insurance carriers that might fit your current portfolio.  Even the largest agencies might only have 75% of the possible options, with smaller ones only getting to 10%.  So, you are probably only getting options from a portion of the market place.

First, If you want to stay with the same carrier, you could do the obvious thing and get a higher deductible, or argue down the insured value.

Secondly,  you could go out to market with another agent on just this one location that is over 30 years old.  This will probably be your best bet to get a lower premium without taking on more risk.

@DJ Cummins

 Each direct writer (State Farm, All State, American Family, etc) are picky when it comes to getting into the commercial space.  Not to mention, these underwriting guidelines are constantly changing.  I am a broker and can tell you that there really is not issue how the property is titled with most independent companies here in the Midwest.  So pick a decent size independent agent that will have access to many companies and they should be able to get you an option very comparable to the one quoted by your wife's aunt.

Estimated annual premium for a $5,000,000 Umbrella going over 75 rental units in each of these cities, 

Minneapolis $1,313

Chicago$1450

Milwaukee $1450

Indianapolis $1,313

Detroit $1,450

Rural locations can have a slightly lower minimum annual premium of $1200.

Email your portfolio today to [email protected] or give me a call @ 414-270-6834 to get a no obligation quote.

Jason Bott
Vice President
Robertson Ryan & Associates, Inc.
330  East Kilbourn
Milwaukee WI 53202
Office 414-270-6834
Fax  414-271-0196
[email protected]