Real Estate Investor · Corinth, TX · Member since 2008 · 72 posts · 11 votes
Here's a question for all you insurance agents and landlords. I recently heard that I may be able to place all (4) of our rental properties under one insurance policy and that it would probably lower our overhead. I've searched all over but have not come up with anything. Are any of you using a homeowners insurance of this type? and if so, what is it called and who offers it?
your responses are greatly appreciated.
You should be able to do this. Its not "homeowner's insurance" though. Its a landlords policy. Landlord policies are going to be more expensive than homeowners insurance. So, if you've been getting homeowners insurance on your rental properties, you're buying the wrong policy. Speak to your agent about what you're doing (holding rentals) and get the correct policy. And inquire about a policy that covers multiple properties.
This is new to me. I adjusted claims on landlord policies before but each policy was for an individual property. You've piqued my interest Mr. Fred. If you get one of these policies, can you e-mail it to me? I would like to see if it's an ACV or and RCV policy. I'd also like to read it to see if losses to multiple properties from the same event (i.e. a hailstorm damaging all 4 homes at the same time) have seperate deductibles or one deductible for the entire event. Got a lot of little green houses that could certainly benefit from some cost reduction. My e-mail is in my sig line. Thank you.
Here's a question for all you insurance agents and landlords. I recently heard that I may be able to place all (4) of our rental properties under one insurance policy and that it would probably lower our overhead.
You are looking for what is known as a BOP (pronounced as hop) which stands for Business Owners Policy.
Thank you gentlemen for your input. Currently, I have separate policies for each house. we've been upfront with our insurance people about the fact they are rentals and have not had a problem so far. Anyway, We also do not have an LLC or any other business entity (just alot of liability coverage). with that, would we still qualify for a Business Owners plan?
Tim, I guess we can both learn from this post :)
Check into a commercial policy and ask for an umbrella policy to cover all your properties and you should even be able to include your personal residence with it. I have been told that this is much cheaper and you can get better coverage. Call a local insurance broker and ask him
Yeah, I'm digging this thread. Choicepoint is a company that acts as a "Credit Bureau" for the insurance industry and flags people and property that make "too many" claims. I'd like to explore this as a possible way of getting my name beyond Choicepoint's eyes.
Well, I've searched all over the internet and cannot find a business owners policy that would be made out to an individual. unfortunately and due to not having a heart to heart with my new accountant, I have not created any type of entity as of yet. I have found quite a few landlord policies though. From what I've understood so far though is that landlords insurance will be more costly. My main drive behind all this is to try and lower our expenses (More cash flow!). We (Wife and I) are still fairly new at this and trying to figure out a way to possibly grow a little quicker.
Thanks again!
I got mine through American Family. Through a local agent I got in contact with my mortgage broker. I didn't specifically ask for this type of policy, but described what I was doing, and the policy they wrote was a "business owners policy." Since the property I'm buying now (should have bought on Friday if they seller (a bank) had their act together) is vacant, and needs rehab, I bought a three month vacant property policy. The business owner policy will kick in once I have a tenant in place.
In another post, MikeOH mentioned "Foremost Insurance".
This sort of policy, or a "landlord policy" may well be more expensive than homeowners insurance. But, its still what you need. It will (or, at least should) cover things a homeowner will never face. Like the loss of rent if you have a fire. And, if you get a owner occupant homeowners policy, and you have a claim, and the company figures out it was really a rental policy, they will just refuse to pay. I'm all for saving money, but you don't want to do something that may cost you big-time in the end.
Pick up the phone and make a few calls. Personally, I hate talking on the phone. But this business runs on the phone, not the internet.
Check into a commercial policy and ask for an umbrella policy to cover all your properties and you should even be able to include your personal residence with it.
With all due respect, I disagree with this approach.
Firstly, Umbrella policies are over and above standard polices and are for the second million, third million, etc. (as a rule). This assumes you already have the first million. Now, this is PER PROPERTY, not cumulative of all properties.
Secondly, doing things like including your personal residence shows that you are operating as a sole-proprietor. This means, if you are sued they can come after your personal stuff... here is the kicker: including your dog (that usually gets people's attention as we Americans forget that animals are considered property by law).
We also do not have an LLC or any other business entity (just alot of liability coverage).
Mr Fred,
The most important thing to get out of this discussion is that you form a business entity ASAP. There are many threads here on BP which speak to this. Many of us have poured our hearts out on the subject already.
Like Jon, I've been able to get a BOP through American Family in the past without having a company set up (it was in my name). You might want to start there . . .
Thank you all! your points and advice is well taken. Jon, the main thing that I'm starting to notice is exactly what you stated. this is an on the phone type business. I spend plenty of time on the phone daily just trying to keep everything running smoothly with just a few properties. I can just imagine what it will be like once we reach our goal. I will definitely be getting on the horn and trying to find an American Family policy.
Christian, we would love nothing more than to establish an entity. our problem so far has been that since our properties are all mortgaged, we would be afraid to move them into an LLC for fear of the due on sale clause.
we just don't quite understand how people do this whose properties are not free and clear. As for an S corp or any other type of entity, we just don't understand enough to jump in. Trust me, we are definitely feeling panicky as we are growing and don't want to lose everything we've worked so hard to acquire. any further suggestions you all may have would be greatly appreciated. thank you all for your time and patience.
This thread is diverging a little. I've spoken with both my mortgage broker and my banker, and both said the same thing. Get the loans in your name, then quit claim them into your LLC. I was sort of surprised to hear this from my banker (Chase), but he went off and spoke with the more senior guy who does the investor type loans and said they had no problem with doing this. Now, who knows, maybe interest rates go back up to 20% and they start calling such loans due. So, you quit claim it back to yourself.
FYI - I got an e-mail from a gentleman letting me know that he got the details on his policy and it was an ACV (Actual Cash Value) policy. I previously wrote a piece here on ACV vs. RCV that is important to know: http://forums.biggerpockets.com//viewtopic.php?t=17026