How is everyone going about getting insurance for properties? Are you carrying a single policy for each property or a master policy for all properties? Who is you favorite insurance carrier?
Hey @Mel Watt I think it really depends on your individual situation. I personally like to carry a single policy for each of my properties. I use foremost to insure my single families and my two 4 units. The reason I go single policy is because it saved me money to go that route over a commercial policy. I also bundle my insurance payment into my escrow account with my taxes and mortgage so I only have one bill to manage. Ultimately it will always boil down to what saves you the most money and time.
I have found it generally less expensive to do individual policies. 1-4 family rentals can be insured under a Dwelling/Fire policy form. When you start trying to combine policies you end up have a Business Owners or Package policy and they are rated as a Commercial policy. The other savings I see is due to the differences in conditions of the properties. You may have some that are fully updated/renovated and in great condition and they usually will get a better rate. Others may be in lesser condition and you can limit the higher cost to just those. Also, some properties you will aquire at much less than it will cost to rebuild that property. For those you may insure them at Actual Cash Value (depreciated value) while others you may insure at the rebuilding cost (Replacement cost). Lastly, if you are using multiple LLC's you may want the separate policies for tax and legal reasons.
I use individual policies for each home I develop/redevelop. I have dwelling coverage which also includes liability for 3rd parties (not employees) and when doing flips, you must make sure you get a vacant home policy. Some try to cheat and get a policy that is for an occupied premises but in the case of a disaster and the house burns down, the insurance company can deny the claim if they see no beds were present or no signs of occupancy. I do not recommend you try and cheat just to save a few bucks on this.