All Forum Posts by: Jason Bott

@Adam Craig 

If the coverages are the same and your commercial Liability Umbrella can go over the personally owned properties, then I do not see a reason not to keep the 7 on your personal property for now. 

Most personal insurance companies max out on rentals before 7, so if you continue to grow, you will need to incorporate a commercial policy one way or another.

Lastely, It is possible your current agent does not have access to additional commercial options that could be more competitive on the pricing.  Send me a PM if you want a list of all the commercial options in OH.

Good Luck!

@Dennis Standers 

A homeowners policy excludes business operations.  So as @Jon Holdman 

eludes to, any claim related to the rental of the property will most likely be denied.

@Brandon Sturgill any commercial insurance policy will have a property rate, premium per $100 of building value and Liability rate, cost per unit/door.  Commercial Property (4 units or greater) rates in the Midwest are running around $0.20 to $0.50 depending on age, building type and occupancy.  Liability rates are $20-$100 per door.

Using the rates on your current policies, you can back into the estimated annual premiums.  So for example, if you fin dour current property rate is $0.30 per $100 and your per door liability rate is $50, you can estimate as follows,

* $200,000 4 family would be $600 for property and $200 for liability, annual total of $800.

* $200,000 10 family, property is $600 per year and liability is $500 for an annual total of $1100.

The total annual premium will probably vary 5-10%, but will give you a good ballpark.

Lastly, this process works best if you are buying like and kind properties.  If you are buying a single family that is 10 years old and then a 5 unit that is 110 years old, just call your broker and get them quoted out.

@Kirk R. 

The main driver to the cost is the Property limit.  So if this property is insured for $25,000, yea, this is high.  If the limit is $300,000, then you have a good deal.

Also, some companies have a minimum premium of $500, so if each home has it's own policy, you will be locked into higher rates.

@James Palin most flippers on the site use NREI.  I will PM you their phone #.

@Thomas D. 

You are working with a personal lines insurance agent, not a commercial lines insurance agent.  When moving to the commercial side we look at the performance of the property portfolio and not the individuals credit.

Nothing against the agent, but when you only represent 1 company, Farmers, you do not have goo perspective on what the marketplace can offer to investors.  You will not have an issue finding another solution.

@April Grieb how many units?  Do you have any liability coverage right now?  How high of a limit are you looking for?

@Roger Vi in the insurance world the other owner has no obligation to pay for your window.  Go ahead and ask, but I don't not believe there is much more you can do about it.

Good luck

@Lynn McGeein 

Insurance companies are increasing rates (cost to insure $100 of property value) AND replacement cost values (cost per sq/ft to rebuild).  There is 1 force that is driving this and that is the strengthening economy.

On the Rate side, insurance companies chased Property business hard in 2008-2011, even writing the business at a loss.   Most other businesses were paying 50% less in insurance from previous years just because the economy was so bad.  This competition was good for landlords as it drove the cost down.  Now the rates are coming back as the underwriters look to write business at a rate they can make $ on.

On the Rebuild side, the strengthening economy is driving up the cost of product and insurance companies payment per sq/ft is going up as well.

Your best stratey to keep you costs down is to get some agents in your corner who have many insurance companies to go to. 

@Bobby Narinov the price difference between your CA policies and the OH policy has more to do with the CA policy being tied to you personal policy package than anything else. 

 $700 is high for $60k, that works out to be a $1.16 per $100, which is double of what is out there.  With only 1 location with low value, the name of the game for you is finding a policy that has a low minimum Premium.  Most companies have a $500 minimum.