Rehab Insurance Help

I'm in the process of closing on a rehab property (my second) and need to purchase an insurance policy to close. On my first rehab I used Formost insurance and paid $1,484 for a property that I purchased for $67,000 and eventually sold for $115,000. The policy seemed a little high to me. Am I right or does it sound about right? Any other companies I could try would also be appreciated.
Thanks

Comments(11)

  • compwhiz20th December, 2004

    I believe Formost will refund you part of the premiums if you sell before the term is up. But rehab premiums are HIGH, and the lion's share of the premium is LIABILITY portion. You can get a builder's risk policy for half that cost, but there's no liability coverage there.

  • norrist20th December, 2004

    Foremost is a great company for the rehab situation. AMIG and Diamond States are others. The rate does not seem out-of-line, and, as CompWhiz stated, Foremost has earned premium percentages lower than most...

    Happy Holidays!

    Tim

  • mbarikmo22nd December, 2004

    I got a quote from Foremost for $2,635 with a $5,000 deductible. (The mortgage is for $95,000) Now my mortgage guy is saying the high premium and deductible will raise a red flag with the lender. I described the house to the insurance company as a rehab that I was going to fix up and sell ,although with a few minor inspection related fixes and some clean up and paint it will be very livable. My mortgage guy suggested looking for insurance while presenting the house as one I'm going to do some cosmetic work to and rent out in a month or two. Will that give me some lower cost options? I thought the high cost was due to the fact that the home will be unoccupied while I do the neccessary work?
    Thanks

  • norrist22nd December, 2004

    I don't know how or why, or for that matter, what the high deductible and premium concerns the lender. In most cases, the lender is protected with a deductible of $500-$1000 in the event the purchaser defaults and the mortgage company becomes the "insured" in a claim.

    You can present it how you want to an insurer, but they will inspect the property and determine what they consider "major rehab" versus "cosmetic". Since they have 60 days right of refusal after binding in most states, they can either cancel coverage or adjust based upon their inspection. Either way, you are better off advising accordingly in the beginning. No sense taking a chance on misrepresentation, either.

    Just my 2 cents...

    Hope it helps.

    Tim

  • shamund2nd February, 2005

    The problem that I am running into is that on gen lia policies, the ins companies are telling me that I need to have the subs to list me on their policy as an additionally insured. Are you all getting your G.L policies this way?

  • InActive_Account29th January, 2005

    18 volt I guess I just expected alot more. I just have to deal with it I guess.

  • dealfinder29th January, 2005

    I agree with Mike. If you are doing an occasional "honey do" around the house, lightweight tools may be adequate. On the other hand, if you are doing rehab work and using your tools to make a living or make a profit from your work, invest in good quality tools and you will come out much farther ahead. IMO stay away from the store "combo" packs that have that attractive price for several tools. The price seems cheap for a reason. Good Luck.

    Dave
    [addsig]

  • InActive_Account30th January, 2005

    By the way, cordless circular saws are 5 inch saws not 6 inch. They are trim saws only.

  • mikejaquish30th January, 2005

    My Rigid cordless saw is 61/2".
    [addsig]

  • TheShortSalePro31st January, 2005

    you are trying to rip a 2 x 4, vs. crosscut. several factor could be causing your blade to lock up. Do you have the appropriate blade for cross cut? Is it lubricated? Is the wood twisted or warped? Your cut must be straight to allow for the blade to operate unobstructed.

    I suggest using a straight edge to enhance accuracy...
    or, if you are going to do a lot of ripping down 2x4s, buy a table saw.

    Many years ago (17) I bought a portable radial arm saw, Ryobi. It has proven to be a great multi-tasker.

  • jam20031st January, 2005

    NC_Yank, what do you think about Rigid, or Porter-Cable?

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