NREIG/Affinity Insurance & umbrella liability insurance
Investor · Napa, CA · Member since 2016 · 100 posts · 53 votes
I have a couple of properties in Detroit that are insured by NREIG/Affinity. I went to get an umbrella liability policy for my properties (these and also those in other states) with my insurer in California, State Farm, and they said that they could not do it given the way those policies with NREIG are written. My friend that's with Farmer's in CA had the same issue. Has anyone been able to get an umbrella policy over properties with the NREIG insurance? And if so, with whom?
This is a common question we receive. It is most likely due to the type of umbrella policy you currently have. Many people purchase a personal umbrella policy to increase their limits of liability to their personal home, autos, and other items they may own. Personal umbrella policies are a cost-effective way for someone to do this. When investment properties are requested to be added to a personal umbrella policy, these coverage issues arise.
Investment properties should be treated as the business operations they are, and should be insured on a commercial premises or general liability form – please know that a residential non-owner occupied, vacant location or a location undergoing renovation (categorized as 1-4 family rental) are considered commercial risks by the insurance industry. These commercial policies are underwritten correctly for the exposures and risks these investment properties carry, which are very different from personal liability exposures. Some agents/carriers will insure an investment property on a personal liability form (which will most likely be cheaper), but cheaper is rarely better when it comes to insurance policies. This is most likely the reason your umbrella policy is extending over State Farm’s primary liability policy for those locations insured with them. Both your primary liability policy and umbrella policy are written on personal lines forms.
If you are currently carrying a personal umbrella policy, this policy form is unable to provide additional cover above a commercial premises or general liability forms (and vice versa). These two policy forms do not “communicate” with each other. The premises liability coverage you have through NREIG is written on a commercial form. There are commercial umbrella policies available for you to purchase that will provide additional cover above what our commercial premises liability form provides. Our coverage form we provide includes a $1,000,000 per occurrence and $2,000,000 annual aggregate limit, per location. These limits are higher than most personal liability policies, which typically come with a $300K or $500K per occurrence limit.
The question is, how much liability coverage do you want or need to carry? There is no right or wrong answer, and every investor is different. This should be based on your portfolio size, the ownership structure of your portfolio, any insurance lending requirements you may have, your past loss history as well as your general appetite for risk. These are all things your agent should discuss with you to design the correct coverage package for your investment portfolio.
This is just one possibility, but is also the most common scenario we see. I am happy to review your umbrella policy to confirm this is the case, and am also happy to answer any additional questions you may have. Please direct message me what day and time works best for you and the best way to reach you.
Jeff & Elizabeth, I have several clients where we were able to place an Umbrella over the NREIG policy. I'll drop you a note with the Umbrella info.
Keep in mind, the direct writers like State Farm, Farmers, etc, only want to go over their own policies.
@Jeff T. no I could not get an umbrella policy. I didn't look much further given two major companies wouldn't do it. I am going to look at going away from NREIG as the costs have gotten really high for my properties in Detroit. Good luck!
This is a common question we receive. It is most likely due to the type of umbrella policy you currently have. Many people purchase a personal umbrella policy to increase their limits of liability to their personal home, autos, and other items they may own. Personal umbrella policies are a cost-effective way for someone to do this. When investment properties are requested to be added to a personal umbrella policy, these coverage issues arise.
Investment properties should be treated as the business operations they are, and should be insured on a commercial premises or general liability form – please know that a residential non-owner occupied, vacant location or a location undergoing renovation (categorized as 1-4 family rental) are considered commercial risks by the insurance industry. These commercial policies are underwritten correctly for the exposures and risks these investment properties carry, which are very different from personal liability exposures. Some agents/carriers will insure an investment property on a personal liability form (which will most likely be cheaper), but cheaper is rarely better when it comes to insurance policies. This is most likely the reason your umbrella policy is extending over State Farm’s primary liability policy for those locations insured with them. Both your primary liability policy and umbrella policy are written on personal lines forms.
If you are currently carrying a personal umbrella policy, this policy form is unable to provide additional cover above a commercial premises or general liability forms (and vice versa). These two policy forms do not “communicate” with each other. The premises liability coverage you have through NREIG is written on a commercial form. There are commercial umbrella policies available for you to purchase that will provide additional cover above what our commercial premises liability form provides. Our coverage form we provide includes a $1,000,000 per occurrence and $2,000,000 annual aggregate limit, per location. These limits are higher than most personal liability policies, which typically come with a $300K or $500K per occurrence limit.
The question is, how much liability coverage do you want or need to carry? There is no right or wrong answer, and every investor is different. This should be based on your portfolio size, the ownership structure of your portfolio, any insurance lending requirements you may have, your past loss history as well as your general appetite for risk. These are all things your agent should discuss with you to design the correct coverage package for your investment portfolio.
This is just one possibility, but is also the most common scenario we see. I am happy to review your umbrella policy to confirm this is the case, and am also happy to answer any additional questions you may have. Please direct message me what day and time works best for you and the best way to reach you.
This is a common question we receive. It is most likely due to the type of umbrella policy you currently have. Many people purchase a personal umbrella policy to increase their limits of liability to their personal home, autos, and other items they may own. Personal umbrella policies are a cost-effective way for someone to do this. When investment properties are requested to be added to a personal umbrella policy, these coverage issues arise.
Investment properties should be treated as the business operations they are, and should be insured on a commercial premises or general liability form – please know that a residential non-owner occupied, vacant location or a location undergoing renovation (categorized as 1-4 family rental) are considered commercial risks by the insurance industry. These commercial policies are underwritten correctly for the exposures and risks these investment properties carry, which are very different from personal liability exposures. Some agents/carriers will insure an investment property on a personal liability form (which will most likely be cheaper), but cheaper is rarely better when it comes to insurance policies. This is most likely the reason your umbrella policy is extending over State Farm’s primary liability policy for those locations insured with them. Both your primary liability policy and umbrella policy are written on personal lines forms.
If you are currently carrying a personal umbrella policy, this policy form is unable to provide additional cover above a commercial premises or general liability forms (and vice versa). These two policy forms do not “communicate” with each other. The premises liability coverage you have through NREIG is written on a commercial form. There are commercial umbrella policies available for you to purchase that will provide additional cover above what our commercial premises liability form provides. Our coverage form we provide includes a $1,000,000 per occurrence and $2,000,000 annual aggregate limit, per location. These limits are higher than most personal liability policies, which typically come with a $300K or $500K per occurrence limit.
The question is, how much liability coverage do you want or need to carry? There is no right or wrong answer, and every investor is different. This should be based on your portfolio size, the ownership structure of your portfolio, any insurance lending requirements you may have, your past loss history as well as your general appetite for risk. These are all things your agent should discuss with you to design the correct coverage package for your investment portfolio.
This is just one possibility, but is also the most common scenario we see. I am happy to review your umbrella policy to confirm this is the case, and am also happy to answer any additional questions you may have. Please direct message me what day and time works best for you and the best way to reach you.
Jeff & Elizabeth, I have several clients where we were able to place an Umbrella over the NREIG policy. I'll drop you a note with the Umbrella info.
Keep in mind, the direct writers like State Farm, Farmers, etc, only want to go over their own policies.
@Elizabeth Goff The increased cost is something I'm concerned about. I have all of my insurance in place now, but I was think of switching to save some money, but I'm worried that the cost might be lower now, but then can change in the future and it's tough to go back to individual policies.
I found that 2 places in the same area will have different companies with the best rates, so I have several different insurance companies for rentals in the same area.
I have just been working with a local agency near the properties that can check a number of different carriers. You might try that.
I am also checking into another company RDIS (rossdiv.com), but I haven't got the quote yet. They work mostly with rental props.
@Shawn Woedl That is some really good info, thanks.
I'm confused though, are you an insurance agent? Do you work for NREIG?
It's not clear and your profile doesn't have any info.
Maybe you can help me with this question I've been wondering about.
What is the difference in coverage between a personal Rental Dwelling policy for a rental and a Commercial policy?
@Jason Bott Thanks for that information. Is the umbrella over the NREIG policy a commercial umbrella policy?
@Jeff T. an Umbrella policy that will go over the NREIG policy HAS to be a commercial Umbrella because the NREIG policy is a commercial policy.
A Personal Umbrella can only go over insurance policies that are made up of Personal insurance forms.
@Jason Bott yes mine was a (attempted) commerical umbrella. The issue is that NREIG isn't the actual insurer and works via master policies (don't know all of the technicalities), which they wouldn't accept. They did however accept my other out of state properties under other insurers so it wasn't an out of state issue or commercial issue.
Elizabeth, this insurance thing is certainly a pain. I'm getting quotes for commercial insurance, but the liability is 1M, so it's hard to compare to the personal insurance with 300k liability plus umbrella. Even considering that it seems like the commercial insurance is more expensive.
I'm trying to get my insurance costs down because FL property insurance is expensive ( supposedly the highest in the country).
I'm concerned about the issue you have with NREIG and I feel like this is turning into a research project trying to understand the insurance issues.
@Elizabeth Goff you have the terminology correct :)
Yes, most companies don't want to go over the program, but there are other commercial Umbrellas that can do it. I PM'd you the info. As an agent, Im not allowed to promote specific companies.
@Jason Bott please PM me the info you have on commercial umbrellas. I too am looking for coverage above my home owners insurance policy on properties owned by LLC's. Thanks!
@Jason Bott please PM me the info you have on commercial umbrellas. I too am looking for coverage above my home owners insurance policy on properties owned by LLC's. Thanks!
Chris, sending the info over now.