Insurance For Rehab Properties
What is the route I should take to get insurance for a vacant property I will be rehabbing? My insurance company doesn't want to touch it. Any thoughts would be appreciated.
What is the route I should take to get insurance for a vacant property I will be rehabbing? My insurance company doesn't want to touch it. Any thoughts would be appreciated.
Who is your insurance company?
My guess is a captive agency, i.e, one that only writes for one company.
If this is the case, you need to find an independent agency, because they will have contracts with several different companies, and odds are that one of those companies will specialize in the type of business you want them to write.
If you are already w/ an independent agency, I'd find one that does have access to this type of market.
Good luck!
call up an insurance broker who is used to deal with investors. The premium is at least as twice as expensive as the regular home owner's insurance.
I rehab and rent instead of reselling so I usually don't run into this problem. However, I did have a property recently that I was considering rehabbing and selling. I asked my independent insurance agent about it and he said that he could easily get it insured. The catch was that the premium was double what it would be if the house was occupied and the premium was totally nonrefundable. He said that I would pay a premium every 3 months(that was equal to 6 months if occupied) and if I was only 1 month into the premium period and I sold the house I could not get anything back. Hope this helps.
You may want to move into it or have it tenant occupied during your rehab process.[ Edited by MattN on Date 11/12/2003 ]
Hey,
Insurance on a Vacant house is more than an occupied house. Insurance on a Rehab project is more than on a Vacant house. That is life; get over it.
If I understand some of the advice given here, some people are recommending that you tell your insurance company the house is occupied, when in fact it is not.
THIS IS A TERRIBLE IDEA (if I know how to make that sentence flash bright green I would.)
If the house burns to the ground, don't you think the insurance company will ask "Where did the tenants go?" If you follow this advice, you have NO insurance.
Play by the rules.
I'm signing for my rehab (Lord WIlling) today.
I chatted with my insurance agent last week & got started on a policy. It is about 2x as expensive as owner occoupied, but worth it.
I'm a builder, and my liability insurance would prolly have covered any damage, but it just wasn't worth the risk.
$214 got me 3 months of coverage, it can be extended, but none of the 1st premium can be refunded.
I can deal with $214.
Oh, I found this insurance agent by word of mouth from other contractors. Turns out they offer the lowest prices on many forms of insurance, and I have most of my insurance needs met thru them.
~Matt
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After much indepth research before my first rehab investment, I found that what you are needing is Remodeler's Builders Risk insurance. An independent agency can obtain this insurance through Zuirch and Accord. I'm not sure if you can buy it direct.
I'm going to echo Bruce a bit and then some, don't screw around with trying to get around insurance, you're going to end up screwing your self up when something happens.
If you can't afford the insurance policy you paid too much for the house, insurance is part of the expense of rehabbing, just like a piece of drywall or the interest on a loan. You have got to figure insuarnce into your calculations when you are coming up with your offer.
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Anyone Aware of a rehab insurance agent in the Northern Ohio area. I am looking in the meantime, but if someone out there knows of one, that would be nice.
Thanks
Foremost has a very client-friendly rehab policy. So does Scottsdale. Our office can help you, if you'd like. 888-741-8454. Sorry for the "ad". [ Edited by norrist on Date 11/09/2003 ]
Hello all,
While on the subject of insurance. What are the advantages or disadvantages of converting insurance policies? I moved out of a repaired repo, and now have a tenant. The insurance hasn't been coverted yet. Is it worth changing or does it make a difference?
In most cases the tenant-occupied property will be less expensive than a vacant/rehab project...not to mention potential coverage gaps.
I just received an unsolicited offer from an insurance company to cover a duplex while being rehabbed. The period was for three months and can be renewed for longer. The rates were very close to 1/4 the annual rate for fully occupied. You might find something if you look around a bit.
I told my insurance company that the property was going to be a rental but it needed some repairs. They knew it wasn't being occupied at the time of remodel but I was still able to get a policy for about a third of what a vacant policy was.
Zurich Direct is one of the best for Builder's Risk policies. They have agents all over the country. My latest quote on a $75K property was $332/yr.
Thank you for all the feedback. I just bought insurance with allstate. they quoted me 1100 for my 4 unit building at a coverage of $250000 they did not know it was a multi unit. I informed them and they only bumbed it up to $1430 for the year and it covered $300,000 with a 2000 deductible. that is much better than other quotes i received for 2100 and 2200.
What do yall think. Was it a good price. The house is in bmore city and it was built in 1900. brick.[ Edited by brandonhthomas on Date 02/16/2005 ]