Hi all -
Currently own a 1/2 duplex and in escrow on 3 duplexes, which would bring me to 7 rental units total (all in TX). Called GEICO to see about upping umbrella limit and adding properties and was advised they only insure up to 4 rental units.
Advice given was to put four units on the umbrella and obtain a commercial policy for the other three, but they don't write those policies. Or get an LLC. But due to financing already in place, can't do an LLC. Has anyone run into this issue before? I was going to hold the new properties (like my current one) in my name. Would creating a trust and holding them there cure this issue? Or any advice on the insurance? Go commercial route or find another insurer without this limit? Thanks in advance! Learned tons reading, glad to finally be moving on something!
Search for a new insurance company.
Use an insurance broker that can give you quotes on carriers that have no limits. I had the same issue.
Lots of insurance companies have various limits on how many properties they will cover. Rather than get all fancy with setting up a LLC or trust and then transferring the properties into that, I'd start by just checking with other insurance companies until you find one that can accommodate your amount of properties.
Also remember to think ahead and plan for the future if you plan on buying more rentals. By that, I mean don't just go with a company that will insure all 7 of your rentals if their max is 8 properties and you know that you'll continue buying beyond that number. It's a pain to have to switch a lot of properties all to a different carrier, so try to plan for that in advance.
If you know a realtor, try to get a referral for an RE attorney who knows the area. They typically work with good brokers. I got mine that way. Good company, good rates, good service.
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