Flipper · Phoenix, AZ · Member since 2009 · 973 posts · 679 votes
Great way to wake up, 4:30 phone call from the police because a drunk driver hit my property.
Took out my brand new meter base, isn't even paid off yet.
I got chewed out by the police and others for not having home owners insurance, so I wanted to break this down and see what your thoughts are.
Insurance was costing me roughly $200 a month on my rentals when I canceled it. That was with a $1,000 deductible. So my repair estimate is $2,000, minus the deductible, the insurance company would have paid $1,000. I'd have paid that in only 5 months premiums. It seems like a huge waste.
My concern would be a fire, or other total loss, but how often does that occur?
Hi, you have a problem! No license and no insurance from either side, all you have left to do is to sue the driver and then attempt to collect yourself. You mortgage holder has the right to require "acceptable insurance", it's in the security agreement (deed of trust), not the note. If you don't carry it they have the right to put a forced place policy on the property to insure only their interests and give you a bill for a much higher premium. Not having insurance will likely cost you when you do put a policy in force, as not having a policy the insurance company will rate you as a poorer risk. You'll need the police report to sue, so make the trip and pay the $5.00. I'd suggest you take it to small claims court, I'm pretty sure you'll win since the defendant probably won't be going to court for a civil suit, he'll probably have other more pressing issues at hand. I have insurance on all my properties, even without a mortgage, and it's a waste of money until a significant loss occurs. It's the cost of an education. Bill
How often a major claim occurs is less important than your personal situation. You're self insuring, which just means you can absorb the loss if it occurs. Insurance is a negative bet or else insurance companies wouldn't exist.
Hopefully you have liability insurance and no mortgages.
Let me ask a stupid question. If you can pay in the event of a total loss why are you paying for a meter bank on an installment plan?
It's not. The 30 days is not yet up on the invoice.
Originally posted by Josh Green:
i'm surprised the mortgagor allows this. is it a private mortgage?
I haven't actually looked into whether there is anything against not having insurance in the mortgage paperwork. The mortgage company does not pay taxes and insurance out of escrow, so I never bothered to tell them, I guess it's something to look into.
Apparently the guy that hit the house was convicted of killing someone while driving drunk a few years ago. No license, no insurance.
The police department has been an absolute nightmare to work with. They refuse to release any information to me without me driving the two hours to come to the station and pay them $5. They have no idea when the report will even be done.. I'll probably have the whole thing fixed before any insurance would even be able to start on it.
Hi, you have a problem! No license and no insurance from either side, all you have left to do is to sue the driver and then attempt to collect yourself. You mortgage holder has the right to require "acceptable insurance", it's in the security agreement (deed of trust), not the note. If you don't carry it they have the right to put a forced place policy on the property to insure only their interests and give you a bill for a much higher premium. Not having insurance will likely cost you when you do put a policy in force, as not having a policy the insurance company will rate you as a poorer risk. You'll need the police report to sue, so make the trip and pay the $5.00. I'd suggest you take it to small claims court, I'm pretty sure you'll win since the defendant probably won't be going to court for a civil suit, he'll probably have other more pressing issues at hand. I have insurance on all my properties, even without a mortgage, and it's a waste of money until a significant loss occurs. It's the cost of an education. Bill
In my 30 year real estate career, I have had:
1. A 2 year old drown in a pool of a house I was managing.
2. My personal residence burn.
3. An apartment complex parking shed burn.
4. A husband murder a wife.
5. Break in for the DEA.
6. Backyard of rental being used to cultivate pot.
7. Drained a septic tank of a rental that had more syringes than a hospital disposal unit.
You bet I carry insurance. Not a big deal on a $2,000 claim, although it is nice to have it paid for. But all it takes is one major hit and you lose everything.
I'm glad that I had insurance. I've had a tree fall on a rental that punched a hole in the roof and did some other damage. I also had an electrical fire that caused significant damage to the house.
One incident could be devastating. If you own multiple properties something is bound to happen over time. I have been fortunate that nothing really serious has occurred, but if it does, I have piece of mind.
The guy's auto insurance should absolutely pay IMO. He was obviously at fault. Even if your homeowner's paid a claim, they would try to subrogate- get the auto to pay.
Also, shop around. Alot of times you can find cheaper rates. I know I saved a lot by going with ERIE a few years back. It has gone up a bit, but they actually pay REPLACEMENT costs (cost to rebuild), which fewer policies do- only cover a particular $ amount.
The problem joe is that the driver had no insurance...nor a license. He's effectively screwed anyway, but the small claims suit on top of this for the meter money should effectively do him in. Sad, but it happens.
Otherwise since he is at fault, then yes, the insurer should pay for the damage..being rather minimal in amount, most auto insurance policies should cover property damage claims like that no problem after filing for it.
I look at that picture and just think how worse things could have been. When I used to be in TV news, we had some stories like this, except the damage was much worse then swiping out a meter like that...mainly punching a hole IN the house.
You lucked out Marc...besides, it'll make a nice life story to add to the books when all is said and done...
What a great number of responses here. I actually read every one of them which I rarely do.
Although Bill gets on my nerves a lot, he's probably got the best point of all. We could safely bet that there is an insurance requirement on the deed of trust. Why would I know this? Because, its usually right in the same paragraph as the reasons why the lender could/would accelerate the loan. Ask me how I would know that.
He's also right, their insurance policy that they will force upon to secure their collateral will be much more expensive than anything you find on the open market. Ask me how I know that.
First...not fun at all to have this happen! Many in your shoes have had frustrations with the way that insurance works in smaller claim situations given that the deductible can be close to what the loss is. Unfortunately, it all has to do with risk, and as many have shared on here, you never know what could happen to your property/properties.
Self-insuring is a great idea if you can afford to pay for smaller losses yourself... One question to ask yourself for sure is in the event of a total loss would you be able to cover your total investment yourself?
I may be a little biased as I'm an insurance agent, but we've seen many of our investors benefit from their policies in all types of losses from the smaller ones to total losses. Trading $2k/year for $100K in the event of a total loss could be a very helpful thing.
Insurance can at times be the difference between keeping your business alive or being "taken out."
That said, you do also want to make sure that you're not paying exhorbitant premiums too... There are a variety of different ways to insure your investment where you can choose the amount of insurance and types of perils you'd be covered for. Many investors like to do ACV policies for this very reason as they can insure for only their investment and not for "replacement cost" which can escalate the premium, but also will give you a greater payout in the event of a smaller loss...
Feel free to take a look at my company's website: [LINK REMOVED]
What I would like to know is, what the heck was this dumba** doing out of prison just a few years after vehicular manslaughter as a result of drunk driving?
Reid, the court system became an enabler long ago. In this instance, the homeowner was lucky that the guy was even caught. There is no effective enforcement or assistance for someone who refuses to change. Thank God no one was killed.
What I would like to know is, what the heck was this dumba** doing out of prison just a few years after vehicular manslaughter as a result of drunk driving?
Reid
That's a great questions, and I wish I knew the answer. The guy apparently did have a valid driver's license. I just got the report. I would think a vehicular manslaughter conviction should be a "lose your license for life" type situation.
But then again, my step daughters father has 3 DUI's and he's still out there driving. The system is pretty worthless anymore if you ask me.
First, shame on you for having rental property and not having insurance on it. Second give Allstate a call. They are the cheapest I could find. I pay $74 bucks a month with a $500 ded on my duplex. My houses are $45 a month.
Tom, funny you should mention that. I work for a major insurance company (won't mention the name), but even with my employee discount of 10%, our rates can't been State Farm's rates. Check them out, too. Their claim service, IMO, is top notch as well.