New SFH Rental. Insurer underwriter is asking A LOT of questions.

6 Replies

I am an out of state investor, self-managing a rental in another state. Suddenly, my Insurance company (who already binded my policy on closing) is starting to at concerned and is asking A LOT of question such as who will manage the property? Who will handle service requests? Who will check in on the property? Who will enforce the collection of rent? Etc Etc Etc. Luckily for me, I have family in that area. But I cannot feel that this is NONE of their Business. Especially considering this is a piddly little SFH Rental. Am I wrong? Is this normal practice?

Larry Hawkins I’m guessing this can be answered if you tell us who your insurance carrier is. If it’s one of the large ones, I have a feeling they make care more then others would

I’m guessing that’s the issue. All my rentals are insured by providers than I’d never heard of before I bought rentals.

I imagine progressive, geico, State Farm etc will give you issues like this.

I agree with Caleb. The smaller companies are less picky and more eager to earn your business. I am an Independent Insurance Agent in Texas who writes policies with a lot of companies. There are a few who ask this question, and many others who don't. Give me a call if you'd like me to check into it for you.

Hi Larry! Interesting to hear that State Farm is asking these in-depth questions, but it doesn't seem odd to me given that you are out-of-state. Perhaps the collection of rent is a little different, but they are just trying to make sure that the property will be properly managed in your absence. 

I will tell you that often times claims we see are a result of absentee PM's. Discovery that the tenants have moved out months prior and the property has now been vandalized multiple times, even burnt down with no one's knowledge. A quality PM is CRUCIAL in preventing unnecessary losses at a property and can save you many headaches and unnecessary expense. They are your partner in helping your investment perform to its highest potential.

If you can use your insurer's questions as a way to helping you make sure you have the best care for your property, it will only be to your advantage. Yes, they are trying to prevent a claim on their end, but a saved claim is a financial loss you don't have to have the pain of experiencing too. 

Hope that helps!

BreAnn

Originally posted by @Account Closed :

I am an out of state investor, self-managing a rental in another state. Suddenly, my Insurance company (who already binded my policy on closing) is starting to at concerned and is asking A LOT of question such as who will manage the property? Who will handle service requests? Who will check in on the property? Who will enforce the collection of rent? Etc Etc Etc. Luckily for me, I have family in that area. But I cannot feel that this is NONE of their Business. Especially considering this is a piddly little SFH Rental. Am I wrong? Is this normal practice?

 A lot of insurance companies are redlining, they just wont admit it.

I have had problems with insurance companies picking up trivial things to complain about in poorer neighborhoods, while ignoring the exact same things in higher end neighborhoods.