All Forum Posts by: Derek Lacy

So you wanted a great insurance policy, through a great insurer (which liberty mutual is) with no underwriting?  

That's like asking for jumbo home mortgage, 4% interest, but don't look at my credit report.  

Regardless of your opinion Liberty Mutual has a great reputation.  Do they underwrite their policies, hell yes.  That's how they keep claims low.  When you keep claims low, you keep pricing low.  

So yeah, they found what they believe in their opinion is a deficient roof.  It's their money that pays out the claim, so their opinion is what matters.  

I think you found some yes men appraisers and inspectors.  "Yes we want you to be happy and close on the house."  They have no skin in the game after the house closes, the insurer does.

I would highly suggest, with the condition you suggest the roof is in (5-8 years left on a shingle might as well be 0 with a preferred underwriter), that you look at Foremost, Berkshire Hathaway, and or USLI.  They will most likely place restrictions on the roof, as in they will not pay for a full replacement due to condition if a hail storm or such comes by.  

But to say an insurer is not reputable because they are protecting every other policy holder that they insure (as they are a mutual so every policy holder is an owner) by underwriting a property is not correct.  You're shooting the messenger, sounds like the problem is the roof.  

Servicer is certainly an easy way to go.  If you would like more of an unbundled experience we have 5 A+ rated markets that write FP coverage.  But unless you really want to service your own note, I suggest bundling the service, we really use the FP polices for the community banks we write which are better enabled to service their own loans.  

Let me know how we can help. And thank you @Account Closed .

Had a baby a month ago and monday morning is a prenatal. Otherwise it will be a pleasure. My assistant, Katie, will be in all day, along with our full staff to help you if it is more urgent. 

 We can through an A+ rated insurers (depending where your primarily invest we may use one or another insurer, but both are rated A+).  Our program use to only be offered to financial institutions and investors with over 1000 properties.  We recently received underwriting clearance to lower the number down to 3 properties.  

We can insure real estate owned.

We can insure on a forced place basis.

We insure on a special ("All-Risk") form including EQ and Flood (except in CA, no EQ). We can include or exclude liability.  We can include or exclude business income.

It is on a reporting form basis, there are no minimums and no vacancy clauses.

Deductibles as low as $1,000 (when most other players start at $3k or $5k.  

We do also write in all 50 states.  We write on a special form policy with liability.  We can include commercial, residential, and mobile home.  We can write flood and EQ on all properties (no EQ in CA though) and we have an easy to use web interface (once the policy is started) where it takes about 2 minutes to input a new property and about 15 seconds to delete a property.  You receive a monthly line itemed billing for the properties, either by e-mail or snail mail.  There is no vacancy clause, no minimum time for a home to be on the policy.  There is a 3 property (not unit)  minimum and they do not count your personal home to that number, only investment properties.  This is underwritten by an A+ rated insurer. 

Quick answer, as long as you did not commit fraud or misrepresent facts to the agent or insurer (like write an e-mail stating "I need to know the cost for the home I live in at 123 Any St" when you don't live there).  You could expect property coverage, but a cancellation forthcoming.

BUT.  Please go to

http://www.iii.org/sites/default/files/docs/pdf/HO3_sample.pdf

That is the standard HO3 policy.

Go to page 17.  This is a liability exclusion.  Check out "Business".  Liability is excluded if you are not occasionally renting the home.  In other words, if it is always a rental.  You have no liability coverage.

I see this all of the time in insurance, people are extremely concerned about full coverage on a $10,000 auto, but they will only carry $100,000 in liability when they are worth $600,000.  They would risk losing $500,000 to save money on a plan, but opt to cover the $10,000 car...

So same thing here, you save $400, but you risk no coverage for that slip and fall that the tenants friend just had at the place.

Remember this is standard language, I have seen two of the name brands put forward an endorsement to standard language stating that the policy is conditional upon owner occupancy.

Business Income or Fair Rental Value coverage is usually available at a nominal cost to any property policy. 

The caveat to that is it is usually not available on Flood and never on a National Flood Service policy.  If that was a huge worry you could always buy a Difference in Conditions policy (DIC), but that would most likely be too expensive of a solution for one rental home. 

So for a flood policy there is not a good easy cheap solution.  All I can say is call your congressperson on that, this has been an ask of the insurance industry for many years. 

My wife, in her past life, was a State Farm Senior underwriter.  She would be interested to see that policy, but leaves two options.  One, are you not as a property investor on the umbrella policy?  They will write umbrellas on many classes of business 1 family dwelling just is not one of them (or was 5 years ago). 

Or maybe it is a personal umbrella policy that they agent is representing as commercial?  What name does it have on the top of it?  If it is your personal name it may be a misrepresented commercial umbrella policy. 

Her or I would admit that there are millions of exceptions to any rule in insurance, heck they insured Jennifer Lopez's backside where does that fit into the scheme of things, but it would be unusual for Big Red (State Farm) to do that.

Agreed with the above.  One item to check is coverage form.  Make sure you are covered on special form instead of basic form for property. 

As for obtaining a commercial umbrella, you need to contact an independent agent.  The Allstate, State Farm, Farmers agents just are not going to do it on a commercial umbrella, heck they won't even write a home if it is in a businesses name. 

@Anissa Sinissi

I have been told they operate a risk management software that gives relative risk factors for an area.  This is usually known as "By-peril rating/underwriting."  Many underwriters do refuse to offer special form in high risk areas.  If I had to guess, is your property in South East Michigan? 

There are a few carriers that will offer special form coverage in such an area, but plan on an expensive bill. 

You are correct that Special form would be important in MI.  Perils not covered on basic but covered on special would be (some not all):  Theft (important in Detroit), water damage (frozen pipes certainly happen in MI), weight of ice and snow (same), etc.

I know of markets that do write special up there, such as Diamond State, Scottsdale, etc, but it's not a low cost policy.