Investor · germantown, MD · Member since 2012 · 5 posts · 3 votes
Hi,
I have a few properties that I thought would be really good deals, but insurance has turned out to be hard to get for them / really expensive. I purchased two houses in Bristol, Tennessee and they are each split into 3 different units with their own kitchens, bathrooms, etc. I have learned that insurance companies really don't like this setup and I have been charged like $1,500 bucks a year in insurance for each property which is a lot considering I purchased the properties for $50K and $80K, but they way that they are acting I wouldn't be surprised if they end up not wanting to insure them at all.
I am interested to see if anyone has ideas on how to insure these types of properties in a more cost efficient manner.
If the houses are Legal 3 family buildings they should be insurable under a "Dwelling Fire" policy. That type of policy is used for 1-4 family houses rented to others. We have been told by multiple companies that the losses are normally greater on the 3-4 family houses verse the 1-2 family houses.
I think you need to get quotes from multiple companies (that may require multiple agents or one agent that represents a lot of companies). You want to request a comparison with the same limits you have and then a quote with any changes they recommend.
Because of differences in age, location, fire protection, limits, etc. you may find that splitting the two houses to different agents/companies may result in best rates but if its close I recommend putting both with the same company.
If the houses are Legal 3 family buildings they should be insurable under a "Dwelling Fire" policy. That type of policy is used for 1-4 family houses rented to others. We have been told by multiple companies that the losses are normally greater on the 3-4 family houses verse the 1-2 family houses.
I think you need to get quotes from multiple companies (that may require multiple agents or one agent that represents a lot of companies). You want to request a comparison with the same limits you have and then a quote with any changes they recommend.
Because of differences in age, location, fire protection, limits, etc. you may find that splitting the two houses to different agents/companies may result in best rates but if its close I recommend putting both with the same company.
@Matt Wassum Like @John Mocker states, if the property has legal occupancy as a 3 unit building, I don't see where the hang up is.
If it is a 3 unit building with shared kitchen or bathroom, then it would most likely be underwritten as a rooming house and that gets to the pricing you are quoting.
I guess I need to review what the legal occupancy of the houses are. This is probably a dumb question, but where is the fastest and best place to look to determine that?
In CT, the Cities/Towns often have the Tax Assessors info or where to find it on their site. I did a quick search and it looks like there is a county site:
http://www.assessor.shelby.tn.us/content.aspx
If that doesn't work call the office and they should be able to tell you the info or send you a copy of the "Field Card" which normally would show the number of families. Sometimes they charge for the copies.