Charlotte, NC · Member since 2014 · 8 posts · 0 votes
I own a 12 unit apartment complex in Venice, Florida on the Gulf Coast. The property was purchased for about $500k and is probably worth about $700k at this point which is mostly the land value. Essentially, the land is probably worth $700k with or without the three buildings it has on it, on it. That said, the question becomes, is it worth carrying hurricane insurance on this property and paying high premiums, high deductibles in the event of a claim etc.? My insurance agent has alluded to it possibly not being worth it. Is that potentially the case?
Insurance Agent · Orlando, FL · Member since 2015 · 297 posts · 122 votes
10y
@Daniel Burdi Realistically since these are concrete block you would still have a partially demolished frame of the buildings. At that point you would likely need to either rebuild, pay to clear the land, or sell the lot at a diminished price since it would need work to be useable again.
It is my understanding that you would not need to rebuild the structures but you may not receive a 100% payout of the policy limits. It depends on the carrier that you are written with.
Insurance Agent · Nationwide · Member since 2014 · 2k+ posts · 1k+ votes
10y
@Daniel Burdi do more risk analysis to drill down to some real $ and claim scenarios.
For starters, what would you do if,
1). No insurance, $100k in damages, and the city will not offer the raze order?
2). Find out from the city what % damage to the building triggers the raze order and structure your insurance around that. What will it cost to clear the site? How many years of insurance premiums until you build up to this?
3). What if the roofs just blow off? Do the building codes require you to install greater wind mitigation style roofs? Does your policy even cover this now? Or are you already carrying this risk yourself?
If you put real world costs to these questions, I think you will drive to the answer that matches your risk tolerance.
Charlotte, NC · Member since 2014 · 8 posts · 0 votes
10y
We have three buildings on the property. They are all concrete block constructed. Premium is $4,251/year with 3% deductibles (min. $10,000). Total building cost is listed as $767,900.
Charlotte, NC · Member since 2014 · 8 posts · 0 votes
10y
@Jared Townsend Based on that article, it would appear that given the building costs, we should go for the insurance. The question in the area we are in is that although it would probably physically cost that much to rebuild those buildings, the land itself without the buildings on it is probably with the same amount. If the area were destroyed by a hurricane, businesses shut down, tourism industry declined etc., would it even be worth rebuilding those buildings on the same lot or just sell the lot and move on.
Alternatively, with insurance, wouldn't I have the option of just being paid on the claim and not having to rebuild. Thus still being able to sell the lot, take the money from the claim and reinvest elsewhere? Or would that not be permitted?
Insurance Agent · Orlando, FL · Member since 2015 · 297 posts · 122 votes
10y
@Daniel Burdi Realistically since these are concrete block you would still have a partially demolished frame of the buildings. At that point you would likely need to either rebuild, pay to clear the land, or sell the lot at a diminished price since it would need work to be useable again.
It is my understanding that you would not need to rebuild the structures but you may not receive a 100% payout of the policy limits. It depends on the carrier that you are written with.