All Forum Posts by: Owen Rosen

Quote from @Kyler Tarr:

I am on contract to purchase an investment property in Ohio and the inspection showed the house has knob and tube wiring even though it was built in 1959. I had an electrician go out today to inspect and give me a quote to fix and should receive the report tomorrow. 

I talked to several insurance brokers and they both said majority of insurance companies do not provide coverage on homes with knob and tube wiring due to potential fire hazard. There are some that provide coverage but of course the premiums and higher. 

I wanted to see if anyone has experience with or owns any properties with knob and tube wiring and what I should do. I will ask the seller for a concession to replace the wiring, which could be $10k-$30k, but I have a feeling they will reject. 

My question is do I go forward with purchasing the property and deal with the higher insurance and potential hazard or is it smarter to walk away? Any advise is greatly appreciated on the subject! 

Thanks!! 

 I still have one house with some existing K&T. I have/had no problem getting insurance with it in place. I am in TN. The biggest hazard is generally the insulation falling off and overheating and setting something on fire, or arcing because of insulation gone and having the same issue. If the insulation is in decent shape and not covered by combustible insulation, and not terribly overloaded, it might last many more years. In the one house that I still have some existing, it's only on an overhead light circuit with no insulation around it, and I minimize the load on the circuit by using only low voltage LED lights. 

Quote from @Owen Rosen:

Quote from @Becca F.:

Great question. I'm going to ask my insurance company. I'd be interested to hear how about this maximum appraisal potential is determined. 

I would guess an older home might be more cost to insure? I also did a local renovation in 2022 bringing it up code. I was told by a local experienced investor that insurance companies will always go cheap with paying out to contractors in the event a property needs to be rebuilt. 

If you're insuring a home to replacement cost, insurance companies don't care about appraisals or what the home is worth.  They care about what they estimate it would cost to rebuild the home.
All else being equal, yes, older homes are more expensive to insure than newer homes for a variety of reasons.

 I guess from an "all things being equal" framework, what are the variety of reasons that an older home are more expensive to insure than newer homes?

Great question. I'm going to ask my insurance company. I'd be interested to hear how about this maximum appraisal potential is determined. 

I would guess an older home might be more cost to insure? I also did a local renovation in 2022 bringing it up code. I was told by a local experienced investor that insurance companies will always go cheap with paying out to contractors in the event a property needs to be rebuilt. 

I was reviewing some renovated listings in my area and one indicated that even though the house was originally built in 1920, because of all the renovations bringing the house to current code, that you could get 2024 rates on insurance.  I imagined that to mean that a 1920 home with no renovations would cost more to insure than one updated to 2024 specifications.

Is this something that is just "known" to flippers/renovators and I am just coming across it?

Does anyone know how insurance companies evaluate these properties and whether or not real value can be realized for insurance for renovation?  Are there any guidelines or best practices (ie: rewiring such a property would be more valuable than updating insulation).

Is it something you need to ask the insurance company about to get, or is all this determined in the initial interview with the potential insurer?

I am going to be lending to an investor on a single family home. There will be renovation of the home that is $82,500 worth of renovation. The Homeowners Insurance will include Builder's Risk. During this renovation period would you, as the lender, want an Actual Cash Value or Full Repair Cost policy in place?

Quote from @Owen Rosen:

Quote from @Andrew Pennington:

am working with them now and had the first policy (with Spinnaker) cancelled for nonpayment/late payment so we rewrote another policy (with Millenial) and having the same payment problem again but at least they are communicating that cancellation is coming. they want me to pay by credit card over the phone so the payment wont be late and cancelled again. but when i go to mycoverageinfo.com to check on status it shows its been paid.

 I don't believe either of these are actual Steadily MGA policies though.  They're just brokering you to other carriers.  Steadily has their own product (with multiple writing companies) and then they offer policies through other carriers just as an independent agency would.  If you're going to work with an agency, you should work with an actual agency rather that is unbiased in my opinion.

I am in California and have Steadily.  I saw their ads on BP.  My broker could not find any other carrier to cover a rental condo.  My umbrella policy just sent me a non-renewal because Steadily is underwritten by Fortega which is not at least B+ rated.  Is Fortega a carrier for Steadily?  I didn't know there are different carriers with Steadily.  Should I ask for a different carrier?  In the meantime, my broker is shopping for other carriers for umbrella policies.

Hi

Does anyone know which companies that are willing to insure multiplexes in California, particularly coastal Oceanside, CA?  I am currently with State Farm but they will not renew the policy after May 2025.  I am beginning to worry after the recent fires, so I am starting now.  Please advise.

Thanks

Mel

Quote from @Owen Rosen:

HEY! It's an insurance agent! Surely you know some answers to these questions:

1. What were the circumstances surrounding these claims? If the insured driver was sued for more than their car insurance covered, the accident must have involved negligence. Or did they crash into a zoo full of endangered species?

2. I believe the standard vehicle liability is $300,000 while the average settlement is less than $60,000. What are the odds of a vehicle accident resulting in a settlement greater than vehicle liability will cover? They must be very low odds because insurance companies are in the business of making money, not paying out maximums.

I’m curious to hear from private real estate investors who’ve faced unexpected insurance claims and were protected by an umbrella insurance policy.

We often see discussions whether investors should use an LLC or an umbrella insurance policy. I have looked for examples of landlords that were protected by their LLC and always come up empty handed. It occurred to me today that I've never asked about umbrella insurance claims.

I’m particularly interested in real-world examples where this type of policy came through during:

• Property damage (fires, storms, floods, etc.)
• Liability claims involving tenants or third parties
• Major unforeseen events

If you’ve ever had to file a claim and your umbrella policy saved your bacon, I’d love to hear:

1. What happened? (The claim situation)
2. How did the umbrella policy protect you?
3. Any lessons learned or advice for other investors?

These stories can help others make better insurance decisions before they need it. I appreciate any insights you can share!