Investor · Baton Rouge, LA · Member since 2014 · 280 posts · 219 votes
I'm not sure if has as much to do with the fact that I purchased in my LLC, but the insurance policy I had on the property gave me a cancellation notice because they did an inspection and determined the firewall did not extend through the roof of the building. Now I am having a good bit of trouble finding a policy for this unit. The one I did find was ridiculously priced.
This unit is parceled as a townhouse, but it acts more like a condo. The HOA insurance covers the exterior of the structure excluding the roof. My agent is now trying to find a commercial policy to fit the situation. It is currently vacant while I am renovating it and I am still trying to decide if I will attempt to resell it first or hold it as a rental. This insurance may be the deciding factor. Does anyone know why condos as rentals are so hard to insure and do you know any companies I should contact that you know write this type of policy?
Real Estate Professional · West Palm Beach, FL · Member since 2012 · 23k+ posts · 13k+ votes
11y
Let's be clear, it's Not a condo, from what you said, so you might stop referring to it as one, and it's obviously not a "condo insurance" issue, it's a fee simple townhouse. Do you have any idea if it's feasible, or how much it costs, to add the firewall in the attic. It's usually just a certain thickness of Sheetrock.
Investor · Front Royal, VA · Member since 2013 · 586 posts · 418 votes
11y
Fixing your firewall shouldn't be a huge cost. It is just extending the dividing wall all the way to the roof. This is because most apartment/condo fires spread through the attic. Check your local building codes or call your fire department and they will be able to tell you their requirements. It is probably just 3/8 gyp board, but it could be longer. This might fix your insurance issues all together.
Thanks for the advice guys, but the writer of the policy actually state it was because "the firewall did not extend THROUGH the roof." That is not an expense I want to take on nor do I think the building would allow. There are several other rentals in the development and I have reached out to the owners to find out which insurers they are using.
Thanks for the tip. Farmer's was actually one of my first calls before I created this post and they do not insure this type of property in my state and neither does their partner Foremost they offered to connect me with.
Lansing, MI · Member since 2015 · 301 posts · 149 votes
11y
Brandon Johnson
If Foremost won't take it you will likely need to go to the Excess and Surplus lines market; which has companies that will insure high risk. Your agent should know how to access these companies.
Thanks to all who offered advice here. My existing insurance agent found me a solution in moving all of my personal policies into one commercial policy since I am now up to 8 units as of last Friday when I purchased a 4-plex. This way I will be able to add and remove properties easily and at much lower rates. Been wanting this approach and they decided since it doesn't look like I plan to slow down anytime soon that this was the right opportunity to change strategy.