Is Foremost BASICS Three Dwelling Fire Insurance a good insurance?

Question

Our property started out in very rough condition (no running water, HUD home, some knob and tube wiring.)  We are switching from a Vacant and Renovation policy for the last four months to a Fire Dwelling policy.  Does that seem like a good idea? What about Foremost as a company?

We do not yet have renters but plan to later.  The property used to be a duplex but was sold as a SFH.  Our plan is to turn it into a 4 unit. The electric is now updated and metered for 4 units, plumbing redone in PEX and is livable.   First goal is to have one of the units done and ready to be rented soon.  My son is living at the property also to attend school.  
If I buy the 12 month policy will I need to change it again when it has a renter?  It says it is intended for 1-4 units and rentals.  My question is, is this the right kind of insurance?
Thank you,
Kerry

Timothy W. · Answer

I'm assuming you're referring to a DP-3 policy.  That's good because it's an all perils policy with exclusions rather than a named perils policy.  The difference is a named perils policy (DP-1 / DP-2).  I have a Foremost DP-3 on mine and I am an independent adjuster (what car does your mechanic drive concept here).  Now Foremost uses in house adjusters (unless there's a catastrophe and they need help) while Erie uses independent adjusters.  I know because I've settled Erie claims as an independent and I was a Farmers staff adjuster.  Farmers and Foremost are part of Zurich and Foremost insures what Farmers won't.  Employee vs. Independent adjuster really doesn't matter.  It depends on the individual adjuster you get.  Farmers and Foremost generally only recruit people with college degrees and do actual background checks on them while some independent firms I have worked with have sent me claims to handle before they even knew how to spell my last name.  Some firms have checked me out ahead of time though, in all fairness.  Your best defense in all this is to know how to read and interpret your insurance policy.  That way you know when to file a claim and how.

Kerry M. · Answer

Thank you Tim W.. for your reply.  Next post at https://www.biggerpockets.com/forums/51/topics/76691-june-30-fiscal-year-disadvantages

Kerry M. · Answer

Thank you @Bill Gulley and @Geof Greeneisen.  So I guess we're on the right track.  Ours is a lower priced home, older and not in finished condition.  I will ask if the agent is an independent adjuster or uses one.  The agent seems to be very familiar with construction, rentals and has built his insurance very consistently in his local and 5 state area.  He said the Erie policy was better or cheaper, but he isn't my primary agent for home and auto (and I don't want to switch that) so we can't get that.  At this point cost is not as much a concern as getting the right coverage/agent/backup if a claim needs to be sent in.
Thank you for walking me through this.

Geof Greeneisen · Answer

Kerry M. I've used Foremost on our houses for a couple of years now. We haven't had any claims so I can't speak to paying out but they have been easy to work with. As Bill Gulley indicated, I go through an independent adjuster which is nice.

When empty I pay a slightly higher "vacant" rate, then once rented I send over first and last page of the lease and it kicks over to an "occupied" rate. However, as occupied I opt for the one year rent coverage option which provides a years rental stream if the house burns down. So the premium turns out to be about the same for me.

Bill Gulley · Answer

It may be all you can get with an older home considering the condition. You won't need to change if it is underwritten as a non-owner occupied dwelling but you might want to review the options when you have it rented. As to Foremost, I used them years ago and no complaints, they specializied in lower priced homes I believe and paid as well as any. I like to use companies with independant adjusters as I can deal with them better than a company guy, IMO and if a company is licensened to do business and there are no local issues with them, they are all about the same IMO. State Farm or AllState can be as bad a as anything out there, so I have not seen a really good company with respect to paying out without due diligence and following the letter of the policy. Good luck

Is Foremost BASICS Three Dwelling Fire Insurance a good insurance?

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