Landlord Insurance Help!!!
I am trying to get quotes for Landlord Insurance so I will be able to factor this into my monthly costs for a (first) investment property I am interested in buying.
I have called 4 companies and on each occassion they ask for my Soc. Sec. # so they can run my credit. I've declined to give it for fear of tacking on inquiries which would lower my FICO score.
I've asked each company to try to work on an estimate based on my FICO score already pulled out by the mortgage company I have been prequalified with, and to assume that I have never filed any claims as I never had property insurance before. On each occassion, the rep on the other line would only say "I can't even proceed unless I pull your credit."
I am now in a Catch-22 situation. If I can't get an estimate, I will not be able to know if my projected income will be worth pursuing or not. And if I had my credit ran everytime, I may no longer qualify for the low rate that was quoted to me by my lender.
Can anyone recommend a good insurance company that specializes with landlords? Otherwise, would a regular homeowner's insurance suffice?
Please advise.
Thanks!!! 
aurera,
Do not fret. Here's the deal. Insurance companies need to underwrite their insurance risks. For example, in auto insurance, an underwriting risk would be age, driving record, gender, etc. Obviously, a teenage male with three speeding tickets and two accidents is going to pay a heck of a lot more than a 55 year old female w/ a perfect record. This is how insurance companies price their products, to charge the accurate premium.
Now, why does your credit score matter? This is relatively new, but the insurance industry has proved that there is a 99% corelation between your insurance score and your claims history/frequency. Notice I said "insurance score". I have found that the insurance "professionals" themselves are not educated at all. They do not use your credit score, but a variation of it, called the insurance score. It typically has the same factors, but concentrates more on timely bill paying, and anything out of the ordinary. For example, two years ago, I had purchased a rental, refied my personal house, and transferred my car loan to a 0% credit card for 12 months, all within the same month. This could be said to be out of the ordinary. Because of this, my "insurance score" was lowered, but my credit score increased! Since I shifted my finances around, it could have meant I was in money trouble, and maybe I could have filed a fraudelent claim w/ an insurance company. It didn't mean anything though, because I have a very good insurance agent that explained this to his underwriter, and they made an exception.
Also, according to my insurance professional, and my mortgage officer, your FICO ignores inquiries made by insurance companies, so you shant fret about that.
However, I too do not like to give my soc. to strangers. For that, I recommend you establish a relationship with a local independent insurance agent. Be sure he is independent, because then he has contracts with several companies, and he can shop all of them to give you the best rate. And, if you work w/ the same person on all your deals, you will have a trustworthy relationship.
In closing, keep this in mind. your insurance score, in most cases, can only lower your premium. They can not deny you coverage simply because you have a bad score. They will reward you for having a good one, though.
Well if you need the quote you need the quote. If you are concerned about the FICO score, after they do the enquiry, have it removed from your record after that, since it is only for a check. You should be able to get it removed.
Couple more things.
A homeowners policy will not work for investment properties.
Two, the insurance company is so automated now that it's all on computer. They simply cannot proceed to the next question until the current question is answered.
Good luck on your first, keep in mind that your next one will be easier. You will be able to ballpark the premium based on what you pay for the first. Of course, if you had a good agent, he/she could ballpark it for you every time, instead of some operator not knowing anything about insurance, except how to push buttons, and have a price spit out at them : )
I assume you're talking about property/casualty/liability insurance. What type of property?
If it's a SFR ask sellers what they are paying and it will be similar. If it's an apartment complex (3+ units) I would double what the current owner is paying, as they have taken a hike latley.
I'm not sure why they're pulling your credit to give you a quote on a property. I've shopped it before and never given out my social.
seems weird to me. Not quite sure what to think of it. I'd keep calling and see if everyone says the same thing in your area.
quote]
Two, the insurance company is so automated now that it's all on computer. They simply cannot proceed to the next question until the current question is answered.
[/quote]
Thanks rentalman for your advise and encouragement.
What you said above is so true which is one reason why I was getting frustrated. I was asking the last person I talked to to try to qualify me the old (pre-PC) way and work on the assumptions I gave them. Her reply: "I just can't do that" WELL, WHY NOT!?! Sure, it will cost them a few more minutes, but they just lost a potential client who plans to insure more properties in the future.
That's exactly right. That is why I strongly encourage you to find a local agent, that you can meet face to face. While I don't guarantee that they will only rely on the computer, in time working with the same person will make it easier and easier...
Quote:
On 2003-10-21 11:11, hibby76 wrote:
I assume you're talking about property/casualty/liability insurance. What type of property?
If it's a SFR ask sellers what they are paying and it will be similar. If it's an apartment complex (3+ units) I would double what the current owner is paying, as they have taken a hike latley.
Hibby76,
It is for a duplex. The current owner pays $500/ year. However, since I don't exactly know what kind of policy he has, nor any discounts he is getting from the Insurer (55+ years old, probably has been using the same company for all his other props, high deductible, etc.) I wanted to get a more accurate quote which would apply to me personally.
I as able to get a quote from the carrier of my Renter's Insurance, but they qouted me around $1400 which I believe is excessive. That is why I am looking for more qoutes.
I agree with the above I use an independant agency for all my insurance needs[car, home , rentals] . Thier always very helpful and they do shop around also they ll let you question them a little more than joe smoe big company.
ED
Go with an independant agency. They will SHOP several different companies for you. thats how I get my best deals. They shop all the companies again annually to my sure I get the best rate always. As someone else said there is nothing like personal service, know your agent, they can be a great resource(If you get my drift).
Ins. and mort. inquiries are of little detriment to FICO...further, should a deal ever be so tight that ins. premiums can prohibit cash flow, time to move on...while ins. is increasingly costly, it has never killed a deal for me...my exp. has indicated that the A-rated providers and their brethren are quite sensitive to credit issues as they should be...a plus to us consumers of high-credit insurance services (claims paying capacity)...prudent disclosure of ss# to qualified providers is fine. Be aware that providers are also qualifying your property via claims history of previous policyholders on that property...a wise strategy in these times. Good luck.[ Edited by ram on Date 10/21/2003 ]