Insurance

[Iraj Kasimi]

Hello all,

I am interested in purchasing an apartment complex in Alabama.  Just wondering, what types of insurance should I carry on the property?  Any advice on where to get the best deal on the insurance?  It's about 30 units.  The area does get tornadoes.

Thanks

Iraj

[Jason Hollon]

What area of Alabama are you looking to purchase your apartment complex?

You should of course have liability insurance at a minimum, as with any rental property.  For hazard coverage, many investors only carry actual-cash-value policies which payout a specified amount of cash in the case of a loss in order to protect the total investment.  If you are using financing, replacement cost insurance may be required by the lender, which would cover the total cost of rebuilding the property.

Foremost is a good place to start for a provider (go through a Farmer's agent to get the best deal - Foremost is owned by Farmer's, and they issue policies in Alabama). 

I have also recently checked out some policies backed by Lloyd's of London, which are very reasonable.  Lookup Arcana Insurance (arcanainsurance.com) - they write these types of policies in Alabama.