Recommended Phoenix-area Insurance Agencies

6 Replies

Hello everyone,

After some research, I couldn't find much info on recommendations for commercial insurance providers. I am working on (LOI/PSA stage) for two properties in the Phoenix MSA. Property #1 is 11 units, Property #2 is a 100+ unit repurposement deal.

I have two specific questions:
1. Would you recommend going through an insurance broker? Or just contact agencies directly?
2. Would you have any recommended insurance brokers and insurance agencies that cover the Phoenix area?

I have two agencies on my list, but I'm curious to hear from others. Nothing like your own head to blind you to other options =).

Thank you all!

Originally posted by @James McCreary :

Hello everyone,

After some research, I couldn't find much info on recommendations for commercial insurance providers. I am working on (LOI/PSA stage) for two properties in the Phoenix MSA. Property #1 is 11 units, Property #2 is a 100+ unit repurposement deal.

I have two specific questions:
1. Would you recommend going through an insurance broker? Or just contact agencies directly?
2. Would you have any recommended insurance brokers and insurance agencies that cover the Phoenix area?

I have two agencies on my list, but I'm curious to hear from others. Nothing like your own head to blind you to other options =).

Thank you all!

 James, a few comments, 

1)  In regards to #1, an insurance broker will work at an agency, so basically they are one in the same.

What you want to zero in on is a commercial broker who is an Independent Agent, not a personal lines agent who occasionally does commercial insurance.

2)  When working with 2 or more agencies, you need to be aware of the "Blocking the market" phenomenon in the insurance biz.  

Let's say you call agent #1 and ask him to give you quotes.  He sends applications to his top 10 companies on Monday.  Tuesday you call agent #2 and ask that she provide you some quotes.  If agent #2 represents the same 10 companies as agent #1, she will be "Blocked" from getting quotes from any of those 10 companies as agent #1 was "1st in".

Solution - after starting the quoting process with agent #1, ask for the companies they will be getting quotes from.  Once you have that list, you can call other agents, give them the list and ask if they have any additional companies that can provide competitive quotes for your 100 unit deal.  Once you talk with 3-4 agents, you will get a feel know when you have covered the market.

3)  If you have your loan secured, ask the loan officer for the Insurance Requirements, which you will almost certainly have for the 100 unit deal.  These requirements should be shared with all of the agents so the agents are quoting the same coverage limits and coverage forms.

I recently shopped insurance for apartments and the prices were all over the place. The price disparity was about 40% apples to apples. After a point I had so many agents stalking me was about to drive me crazy. 

As in all insurance of any kind, the devil is in the exceptions, read your exclusions. Both brokers or people working directly corporate, all play games with the total insured and exclusions. They tend to use what ever tool in the box they have to bait you in to expending your time with them. Set your parameters and I would also in addition to; use email to keep things straight. I can't tell you how many times agents would conveniently misunderstand my parameters  on the policy(s) to give their self a leg up on the final number

Good luck

@Jason Bott and @Charley C. Thank you both so much, that information is very helpful. I will ask our lender for some insurance requirements and do some shopping from independent agents.

I'm curious Charley, what have you prioritized as must-haves in your insurance policy? I read these things word for word, but without a bar to measure against, its difficult to say whether we are being shorted or given a lot of value in our coverage.

Thanks again.

its been a few weeks now so my memory is getting foggy. 

each type of coverage could have different deductibles and percentage coverage

1) total value of course

2) wind storm/rain/hail

3) fire is always there but the deductible can change

4) liability and who and how

5) plumbing problems like pipe burst

6) medical can get stupidly not enough if someone gets hurt

there was a lot more, things I never thought of until I got down and started reading the binders right before it was time to sign

Originally posted by @James McCreary :

@Jason Bott and @Charley C. Thank you both so much, that information is very helpful. I will ask our lender for some insurance requirements and do some shopping from independent agents.

I'm curious Charley, what have you prioritized as must-haves in your insurance policy? I read these things word for word, but without a bar to measure against, its difficult to say whether we are being shorted or given a lot of value in our coverage.

Thanks again.

 James,  

At a minimum, rental properties should have three coverages:

  • General Liability Coverage
  • Building Coverage
  • Loss of Rents / Business Income Coverage

General Liability Coverage - covers against lawsuits claiming you are responsible for Bodily Injury and/or Property Damage.

Bodily Injury – i.e. a slip and fall by a tenant or other person on your property.

Property Damage – i.e. a fire at your property damages neighboring properties you

do not own.

Building Coverage – this mitigates and restores the building from covered losses and this coverage is required by lenders to secure loans.

Building Coverage – i.e. fire, wind, water, vehicle impacts and other elements of structural damage.

Loss of Rents/ Business Income Coverage– pays for loss of rental income when a building that is rented to others is damaged by a covered loss.

Other items to consider:

1) Ideally have Replacement Cost, not Actual Cash Value (ACV). However, ACV may be the only option on older properties.

2) Ask for Special Form coverage. If they only offer Basic Form Coverage, be aware water and theft claims are excluded.

This is not a complete list, but are the most impactful coverages following a claim. Consult a qualified agent well versed in rental property insurance to review your specific insurance needs.