I bought a foreclosure property a few months ago with three houses on it. Two are rented and insured. The largest one is boarded up. I have a policy with Foremost for vacancy insurance and I just got a cancellation from them, saying it does not meet their "standards".
I am paying $2,900 a year with Foremost and I get cancelled? Really? That policy if N.O.O. rental is about $900 a year. This house is not that bad and not a ghetto; I have to replace a few missing roof shingles, fix some minor stucco cracks, replace the windows (18) so I can un-board it and do the interior updating so it can be rented. I will be doing the work over the next 4-6 months.
I thought vacancy policies were one of Foremost's specialties. Now, I'm looking for insurance again. I'm going to contact NREI / Affinity. I also know American Modern does these policies. Any other suggestions? Am I going to get cancelled in the future from these other companies as well? Thanks in advance!!
I represent Foremost and can tell you that they will insure a vacant building, but not a home that needs a lot of work. Missing shingles and other deferred building maintenance will be issues for them. I also represent NREI and am pretty sure they will be more flexible and be a good fit for you.
If NREI can't do it, then do it the old school way. You can purchase a Builders risk policy and pair it with a General Liability policy. You will probably be in the $2k-$3k range this way.
Thanks for the advice guys!
@ Jason Bott
I would think at triple the premium they would accept some issues, like I said it's not a run down ghetto. But, ok, on to the next.
Thanks for the advice on the Builder's policy! I was wondering what guys do when they have boarded up foreclosures and can't maintain a vacancy policy. That at least gives me another option if needed.
I am waiting to hear back on an offer for a REO that needs a fair amount of work in my opinion, but it is all inside stuff like floor coverings, paint, minor kitchen and bath rehab. The roof is fairly new and good condition and all the exterior doors and windows are good. I have all my mobile policies with Foremost and was thinking about them for this depending on how they compare with Allstate which has my other site built homes. since this may take a few months to get to rentable shape I am guessing I will need a vacant building policy for that time. Do you think that what I described would be an issue for Foremost?
I would think foremost can do it, but you may want to price out a builders risk. The vacant policy can exclude theft and improvements, or have a very high deductible. A builders risk policy will give you coverage for materials that are on site but not installed yet, example being cabinets, carpet, vinyl, etc. Both of these types of policies will have a set term to them, 3mo,6mo or 1 year and most likely any unused time is not refunded. Also, a builders risk takes into consideration that you are increasing the building value over a short period of time, while the vacant will most likely only give you what you paid for it, not the improvements.
1 more thing to note, the builders risk is only property protection, so you will need to have Allstate or Foremost write liability coverage on the property. I know Foremost can do this, not sure about Allstate.
I used to use foremost but they kept cancelling me as well. I now started using Providence Mutual Fire Insurance Company.
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