All Forum Posts by: Derek Lacy

first off. Will this be a house you occupy?

Second from slim to most it goes [1,2,3,5]. 4 is “renters”; 6 is condo, 8 is modified value. 

On an owner occupied, nothing broader than a 5 unless endorsed. 

Broad form would indicate HO2.

Here’s what everyone misses. On the below example of 108k replacement and 35k market value. Let’s say 50% of the dwelling burns down. What do you want $17,500 or $54,000? Because I guarantee that even $54,000 will seem a little short when you rebuild. Or if you choose to tear down and move on, are you willing to pay $10,000 for the tear down and take the $27,500 loss? Now if you have 50+ houses,this is a different topic. But at a handful, get replacement cost. You cannot afford to go without it. Remember the easiest way to think of the value on your policy is that percentage method. Many want to fool themselves into believing it means the first $35k of damages, but that’s not how most policies read.

John Smith That is pretending judges cannot just change the rule. They can make you lien inferior, they could force sheriff sale and waive the lien. With that said, it would make it harder to collect. But if they are that persistent. Your going to rack up legal bills defending higher than the judgement. Just buy a good insurance policy.

@Cara Lonsdale 

I answered that 2 days ago. Standard insurance coverage should cover it. Cut-rate coverage does not. 

Basically if you call a broker and say I want the cheapest insurance, you end up with an adjuster that gives the cheapest of settlements.

OR... the broker assumed she wanted the cheapest and sold that with no consultation on the coverage. 

Again there is no “standard,” insurance is not a commodity.  My guess is she was on a basic form. That is the lowest coverage form readily available and is not considered “standard” coverage. The rate is usually 10-20% lower though. 

Originally posted by @Cara Lonsdale:

Originally posted by @Derek Lacy:

Originally posted by @Cara Lonsdale:

Originally posted by @Derek Lacy:

Cara Lonsdale insurance absolutely covers that type of thing. Cut-rate coverage does not.

 For clarification, are you saying that pipes that burst due to the negligence of a tenant and/or owner who doesn't winterize before turning down/off the thermostat to leave the premises are covered under your policies?  What happens if the pipes are galvenized?

 I have never seen a galvanized pipe exclusion, so I’m unsure what you mean by that. Are houses with galvanized pipes harder to insure, yep. But not impossible. 

And yes you can get coverage for freeze on pipes in unoccupied homes. I basically require it on my clients north of the mason-Dixon. 

Are these endorsements or acceptances on every policy. Nope. Are they readily available for my clients. Yes. 

 So, if it's an unoccupied property, it's covered.  So, I am assuming it's a vacancy policy?  What about an occupied property where the tenant just went on vacation and turned off the heat, thus causing the pipes to burst.  

Yes easily coverable.  Usually in a “standard” policy.  

Here’s something to remember on what is covered, whatever is between the cover pages of the policy. 

100% of policies issued today have endorsements adding or subtracting coverage from the ISO standard (if they are not already on their own non-ISO form).  There is no “standard.”

If you own 50+ Sfh properties and are not discussing what you want and not want covered. I don’t know what to say.  It’s all or none coverable. 

I have a policy we rep that eliminates the vacancy clause (coverage applies if vacant or if occupied), covers freeze for unoccupied (occupied is usually covered under the standard policy), covers flood in all flood zones, cover EQ in all states but CA, and is month to month on the properties. $1,000,000 liability per occurrence. Even allows multiple named insureds. 

Need EQ in CA, there’s a policy for that. Need 25,000,000 in Liability?  Umbrellas all day for that. 

But starting price is about $50,000 for that base policy. Which at a $2,500 deductible would cover a little over $9,000,000 in property values.  So it’s not a policy for every investor. But a big thank you to the 53 investors I now have in that product. 

Generally if it’s accidental, sudden and direct it can be covered by insurance. 

Or you can buy a basic form policy on $60,000 value because it was cheap and pay $10,000-40,000 per popped pipe. 

So we have gone over it’s coverable. I just don’t understand why one would think it’s covered and then it’s not covered. My guess is the phrase “I’ll take the lower cost one” entered the conversation.  But if it didn’t. Then it’s possible there is an agent error here. 

Originally posted by @Cara Lonsdale:

Originally posted by @Derek Lacy:

Cara Lonsdale insurance absolutely covers that type of thing. Cut-rate coverage does not.

 For clarification, are you saying that pipes that burst due to the negligence of a tenant and/or owner who doesn't winterize before turning down/off the thermostat to leave the premises are covered under your policies?  What happens if the pipes are galvenized?

 I have never seen a galvanized pipe exclusion, so I’m unsure what you mean by that. Are houses with galvanized pipes harder to insure, yep. But not impossible. 

And yes you can get coverage for freeze on pipes in unoccupied homes. I basically require it on my clients north of the mason-Dixon. 

Are these endorsements or acceptances on every policy. Nope. Are they readily available for my clients. Yes. 

Linda Pasas What did your broker say when you asked why it as not covered. Was it a choice you made? That’s easily coverable.

Cara Lonsdale insurance absolutely covers that type of thing. Cut-rate coverage does not.

Lol. Your not getting that policy documentation, because that isn’t how it works. There is no covered peril of “he couldn’t afford it.”