Liability Insurance On 4-plex?
Just got off the phone with an independent insurance agent who quoted $2500/yr for a $200K value 4-plex. This gives $200K building coverage & $600K liability coverage ($300K/incident).
I never thought the insurance would be that high!! Its almost a deal breaker.
Do most investors ignore liability?
What is a reasonable insurance amount for properties?
Help!!
Thanks,
Joe
What do you mean by liability insurance for a 4-plex? Are we talking the minimum necessary to protect a lender (mostly fire and theft)?
If you really mean liability speak with some agents about umbrella insurance. As this sort of insurance comes after the main policy they can tell you just how much the main policy needs to provide in coverage.
John
[addsig]
The liability was for coverage against being sued by people on the property. As I understand it, it is coverage if someone injures themselves on the property and sues me the owner.
Thanks!!
Things are crazy like that in CA as well.
Supposedly it's the risk of no firewalls btwn using. So one unit burns all can.
This is more common (lack of fire walls) and the rate is higher. That said, what about a fire policy and general liability in lesser amounts? Put the property in trust with an LLC as beneficiary. That way if they sue you can withhold payments forever or until they get tired of getting nothing, whichever comes first....
Decreasing the liability usually doesn't generate enough savings to merit doing. Carry higher ($5000 plus) deductibles on the property. Find an Agent versed in REI insurance and preferably, one that invests themselves...
This article may help you as well:
http://www.thecreativeinvestor.com/modules.php?name=News&file=article&articleid=438
Quote:
On 2004-06-07 17:03, Stockpro99 wrote:
This is more common (lack of fire walls) and the rate is higher. That said, what about a fire policy and general liability in lesser amounts? Put the property in trust with an LLC as beneficiary. That way if they sue you can withhold payments forever or until they get tired of getting nothing, whichever comes first....
The prpblem w/ not having a real person owning the property, if the won't write the policy at all.
last week I looked at a 5-unit city property asking price of $85,900 (assessed value just over $100,000). she showed me her liability/hazard policy and the premium was $3,000 - I forget the deductible. seller said if I wanted to make an offer to be sure to put in it that it was contingent upon my being able to obtain insurance coverage as it is tough to obtain
Turns out that good 'ol state farm and farmers would write a homeowners policy in my name and name the LLC as an additional insured.
That was good news.