Insurance On Vacent Property-No One Will Insure Me
I am in the process of buying a property in Michigan to rehab and rent or flip, but am having a difficult time finding an insurance company that will insure a vacant non-residence. On top of that the home is currently condemned due to health reasons (Dogs left unattended in home for extended periods of time).
Structurally the home is sound, but itdoes have a few minor saftey issues like loose stair railings and uneven broken concrete. Have any of you rehabbers been in the same situation, and will I be able to insure a condemned house until I can get an occupancy permit? How difficult is it for you to get insurance on a vacant property while under rehab?
Any ideas on how to work out a deal with the current owner so I can rehab until an occupancy permit is issued and then finalize the sale, maybe a Lease Option with me covering repair costs? The current owners are REI who bought the property in a pre-forclosure deal, they tell me they have insurance coverage. I was unable to obtain coverage through their insurance company.
I am due to close next week and would appreciate any input on this matter.
Thanks...Bill[ Edited by Banhel on Date 09/22/2003 ]
I can see why you are having a hard time. If you are organized as an entity, you can list the property on your CGL policy. That might be the way to go.
If the current insurance holder is not willing to insure it for you...it makes me wonder if there is an underlying factor to why they wont....did they state a reason as to why?
What is a CGL policy, I am not familiar with that term?
The current policy holder said the current owners are Grandfathered under an older blanket Builders Risk policy and per new corporate rules the company no longer writes policies for individules, only businesses with 20K or more in premiums.
Any other ideas or comments would be appreciated.
Bill
A CGL policy is a corporate general liability policy. See an independent insurance brokerage, they may be able to shop you around and find something that fits your needs.
I used the same insurance company I have for my homeowners policy. They did it over the phone and only asked me to send a photo of the front and back of the house. I had the 10 foot tall weeds cut and took the photos so that you could not see all of the damage to the outside and they covered me.
The house had been vacant for years. Kids had torn the place up real good. They through a bowling ball through the walls and the floor in two places. The guy I cut the weeds found the bowling ball in the yard when his brush hog hit it.
Only the kitchen window was not broken out. We hauled off a 40 Yd. dumpster of trash.
I'm in the same boat. I have a vacant non owner occupied residence that I am purchasing but am having issues with getting it insured. I went with my own insurance guy and he finally got me covered thru ESN network (Excess Surplus ??) it is expensive $1,700 prepaid for the year. The underwriters were Lloyds of London and ??(forgot the other). But anyways it was tough finding the coverage.
[addsig]
We do a liability only and attach it to our homeowner policy we have ,they do not ask any questions and it will help get you through until the property can pass county inspections. Good Luck
Since you are rehabbing, you should have no problem obtaining a builder's risk policy from an insurance company like Zurich. Most Farmers Insurance Group Agents write for Zurich. This policy will also provide coverage for a limited time for a vacant structure after the repairs are complete.
In Texas there is also an insurance carrier called Foremost that will cover hard to insure properties at a higher premium.
Thanks for all the replies. Farmers Insurance finally came through with a Basic Risk policy . The only catch is that I have to move my current residence policy with them too, something all the other companies also required before they would even talk insurance on a 2nd property. BTW their quote for my residence was cheaper and better coverage than what I'm currently paying.
A hint for anyone else in the same situation...call the small independent agencies, the BIG boys won't even talk to you once you mention Vacant property, and they ran when I mentioned condemned. The small independent agencies want our business.
Good luck to all...Bill
Adding my $.02 I talked with my State Farm agent and he said that so long as the house was going to be vacant for less than 6 months they could cover it as a rental. If longer than 6 months you would need to recontact them and infom them of this fact.
Hope this helps for someone else.
Lethe
Seems that coverage varies from state to state. I started with my State Farm agent since my residence was insured through them. They flat out said they would not insure a vacant property or rental, and didn't care whether I moved my policy to another company.
I heard that Michigan & Texas are tops on the list for claims made, so the fewer policies written in those states means less claims to pay. Be glad you live in MD.