Class C, Mixed-Use Retail/Residential Insurance

3 Replies

I bought a mixed use property in December that is Class C in very blue collar city in California.  

Roughly 5,000 sq ft of Retail and 2,000 sq ft of residential.  I have it free and clear right now.  Insurance quotes are coming in at 5,000-6,000/year which I think is way too high.

Anyone have any recommendations for insurers that have a good price on this?  My insurance is usually 2-3% of revenue.  On this it would be 8-9%.  

Its most likely due to the commercial nature of the property equating to more traffic, more chances of something going wrong and somebody suing you. Have you owned commercial before @Steve L. ?

Hi Steve-

The apartments from the mixed use are what is driving the increased rates. The last couple years the major/national insurers have responded to the claims activities they had experienced after the 08 bubble which caused property owners/mgmt firms cutting corners to make ends meet as the tenants were doing the same. This caused a dramatic increase of losses over a consistent number of years which again we have seen consistent increases as well as carriers completely pulling out of the space completely. One of the big players to do this was Travelers who did in a number of markets.

Couple words of encouragement from an individual who lives and breathes insurance:
1) Do some homework and simply Google Independent Agents in your area and look at their websites for the companies they represent. Find one that you think you may be comfortable with and give them a call to learn more about them and who they represent. They can bid out your insurance with all of the carriers they represent and find the best option to find the balance which fits your needs of price+coverage. I would put good money a smaller (but financially strong) regional insurer could put a nice program together for you. No matter what--Stay away from Captives (State Farm, Farmers, Allstate).

2) As with everything in life you truly get what you pay for. As with all investments each person has different "pain" thresholds. Only you know what yours are and they need to be weighed heavily. I encourage you to never (unless you have no other options) sacrifice a couple things: Never accept COINSURANCE, Always push for Business Income on an Actual Loss Sustained Basis + Extra Expense and given the environment we have which is constantly changing consider Ordinance or Law Coverages A, B & C.

3) Review quotes with the agent and ask all questions you have. They are your eyes and ears to the marketplace and should advise you on the differences in the forms.

4) ALWAYS read the first 15 or so pages (declaration pages) of your policy to confirm it is what you need. Remember that an insurance policy is a legal document. A legal doc must be accurate to the finest detail. I see claims denied all the time due to the wrong named insured, wrong address or incorrect issuance of the policy vs what had been sold- all which could have been avoided had the agent done their job and the insured actually read the policy.

Sorry to be so long winded but hope it helps.

If I can be of any assistance let me know. Just trying to help a fellow BP-r!

Originally posted by @Rob Beland :

Its most likely due to the commercial nature of the property equating to more traffic, more chances of something going wrong and somebody suing you. Have you owned commercial before @Steve L.?

 Yes, I own lots of commercial.  I don't own any other mixed-use. 

Originally posted by @Pete Olson:

1) Do some homework and simply Google Independent Agents in your area and look at their websites for the companies they represent. Find one that you think you may be comfortable with and give them a call to learn more about them and who they represent. They can bid out your insurance with all of the carriers they represent and find the best option to find the balance which fits your needs of price+coverage. I would put good money a smaller (but financially strong) regional insurer could put a nice program together for you. No matter what--Stay away from Captives (State Farm, Farmers, Allstate).

I already use a small/medium sized independent agent and a commercial specialist.  Both of them have given me similar numbers. What is the best way to find a regional insurer?

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