Investor · Ann Arbor, MI · Member since 2015 · 14 posts · 3 votes
I own a rental duplex in Michigan and my current Rental Dwelling insurance agent is State Farm. Considering the big rain and flood we had in Michigan 2014, I am considering to add flooding or Sewer Drain backup to policy. Here is the answer I got from my StateFarm insurance agent. "The Backup of Sewer and Drain endorsement is not available on Rental Dwelling Policies. Therefore, your property at *** is not eligible." Any advise? Can anyone recommend an insurance agent that provide Rental Dwelling insurance with flooding or Sewer Drain backup? Thanks!
Back up of sewer is available on many commercial insurance policies. Pricing and availability may be determined by the geographical location of the property. Cost can be $10-$100 for $5,000 - $10,000 depending on the company
Flood policies are always separate stand alone policies.
Renters can only insure their own possessions/property. Renters insurance does not cover the rental dwelling/protect the landlord's building from weather related claims.
Investor · Sunnyside, Queens, NY · Member since 2015 · 213 posts · 159 votes
9y
Same here, I have State Farm for investment properties in Tennessee. I'm looking for a solution too.
Can we put this in the leases saying tenants must carry renters insurance to cover this or they will be liable for sewer back ups?
Investor · Ann Arbor, MI · Member since 2015 · 14 posts · 3 votes
9y
I thought about that and discussed briefly with the agent. I am not sure about the feasibility of asking tenants to buy that policy. Basically, renter insurance covers tenants' possessions. The things at basement that need protection are boilers, furnaces, washers and dryers, etc. and they all belong to the landlord. Anyone can advice how to handle such situation??
Back up of sewer is available on many commercial insurance policies. Pricing and availability may be determined by the geographical location of the property. Cost can be $10-$100 for $5,000 - $10,000 depending on the company
Flood policies are always separate stand alone policies.
Renters can only insure their own possessions/property. Renters insurance does not cover the rental dwelling/protect the landlord's building from weather related claims.
Back up of sewer is available on many commercial insurance policies. Pricing and availability may be determined by the geographical location of the property. Cost can be $10-$100 for $5,000 - $10,000 depending on the company
Flood policies are always separate stand alone policies.
Renters can only insure their own possessions/property. Renters insurance does not cover the rental dwelling/protect the landlord's building from weather related claims.
Hope that help clearify things.
@Jason Bott, Can you recommend a few companies you know that have the sewer backup available? We know StateFarm does not have that policy...
Insurance Agent · Norwalk, CT · Member since 2016 · 2k+ posts · 1k+ votes
9y
John,
What Jason told you is correct, there are companies that will endorse Backup of Sewers & Drains on to a policy. Most companies will add coverage up to a particular limit that you will need to specify or chose (ie. $5,000 $10,000 etc...). You need to make sure the new company is providing enough coverage. One of our carriers that I think writes in MI has the coverage but only up to $5,000 (not enough).
Flood is a stand alone policy. It can be from the National Flood Insurance program (NFIP) or companies authorized by them ("Write Your Own" carriers). Recently there have been a small number of private insurance policies popping up. I have heard some good things about the rates with these new carriers. Need to check to see if your Mortgagee will accept a none NFIP company.
Investor · Ann Arbor, MI · Member since 2015 · 14 posts · 3 votes
9y
@John Mocker, thanks for useful information. $5000 is better than nothing. Right now, I do not have any protection for sewer backup.
Just want to confirm what I understand it correctly. I can keep my current StateFarm Rental Dwelling insurance and buy stand alone flood insurance. Our current mortgagee has no problem with our current StateFarm policy without sewer backup and without flood.
Investor · Sunnyside, Queens, NY · Member since 2015 · 213 posts · 159 votes
9y
@Account Closed you're right. I misspoke. But tenants should have renters insurance to cover their posessions if flooding damage occurs and I should either set aside more reserves (maybe $100/mth) to cover flooding or find an insurance carrier that would cover this. Let me know if I am wrong on any of this, thanks!
Insurance Agent · Norwalk, CT · Member since 2016 · 2k+ posts · 1k+ votes
9y
You should be able to purchase the Flood policy separately. Your state farm agent should be able to access NFIP or they may participate in the write your own. I have not dealt with any of the non NFIP flood policies that have popped up. If you do a google search you may find them (at least one was in FL).
Investor · Denver, CO · Member since 2016 · 736 posts · 582 votes
9y
@John Wang based on the way you wrote your initial question, I think there are a couple of separate issues may be thinking of.
Flood due to natural disaster is usually covered by "flood insurance". Pricing depends on the location and flood zone maps and is offered as has been mentioned via the NFIP.
"Flooding" and consequential damage due to burst pipes can be covered through a 'DP-3' type policy and your insurance company may or may not offer that depending on risk (I have two rentals where it's allowed and one where it is not). A standard (DP-1) policy basically covers wind/hail/and fire and not much else.
In my experience, sewer backup is tough to find in a policy. The insurance companies I've talked to don't provide it for rentals (and are expensive on personal residence). An alternative though is to have a plumber install a sewer backflow valve (link to FEMA website)
Investor · Sunnyside, Queens, NY · Member since 2015 · 213 posts · 159 votes
9y
@John Wang BP has a messaging feature. If it doesn't allow attachments and a copy paste it too cumbersome, I've left my email address in your messages. Thanks !
Rental Property Investor · Crystal Bay · Member since 2019 · 59 posts · 38 votes
5y
@John Wang
Y’all look like geniuses now if you did get coverage. My property and thousands of others had sewer backup flooding recently in Detroit- estimates to repair so far are about $12k (furnace, water heater, washer/dryer)
Allstate said same thing- it’s available on primary residences and not offered on landlord policies.
What options are there then? It seems to make no sense that a property sewer backup isn’t covered because of who is dwelling in the home, seems like some sort of insurance discrimination there. I guess time to look into that class action.
Insurance Broker · Kansas City, MO · Member since 2017 · 370 posts · 127 votes
5y
@Joseph Hummel All companies have different rules and regulations for what coverage they can provide on their policies determined on how they are registered through that individual state.
My best suggestion would be to seek out an insurance broker to help you determine which companies DO have the ability to provide that coverage on any of their property policies.
Sorry to hear you're having to go through this. Unfortunately, it's far too common because of either the lack of education of what's available or just not having proper guidance for coverage.
Rental Property Investor · Crystal Bay · Member since 2019 · 59 posts · 38 votes
5y
@Matt Moylan
Agreed- they say it’s once in 500 yr event… but it’s happened twice in 10 yrs.
Allstate said the insurance commissioners department is what sets those regulations. Seems convoluted and possibly even discriminatory toward those that would rent.
Hate to throw that word around but it just doesn’t make sense - something that effects everyone equally should be offered equally.