All Forum Posts by: Jared Newsom

I don't know any Agents in your neck of the woods, but if you use a local Independent Agent they will be able to shop lots of companies for you, some of which will allow you insure for less than replacement cost. Independent Agents are a great resource for Real Estate Investors because they can provide you with lots of options. Good luck.

I don't know why the adjuster has already told you the roof damage will not be covered unless you do not have proper coverage on your policy.  In Texas, you can choose Replacement Cost roof coverage, Actual Cash Value roof coverage (which factors age and depreciation to give a partial payout instead of full payout), or no coverage at all for wind & hail damage (an exclusion).  You need to review your policy.  If the missing shingles were caused by the storm and you have the proper roof coverage, it should be paid by insurance.  If the roof is only 7 years old and they say it is in bad shape due to its age, I would get a second opinion from a contractor.  Even in harsh climates, a modern shingle roof should last 15+ years.  You also have the right to ask for a second insurance adjuster to inspect the property if you feel that the first one did not perform his duties correctly.  It's unfortunate, but some insurance companies are less willing than others to pay claims and it's up to the homeowner and their agent to fight it.  This is why I always recommend using an Independent Agent that has the best interest of the customer at heart, not the best interest of the companies bottom line.  Good Luck! 

As an Agent in a coastal area, here's my advice:

Find a roofer who can provide a temporary fix such as placing a tarp over the damaged area until the weather allows for a better assessment.  If you end up claiming it on insurance, this cost will be covered.  Insurance companies want you to be proactive to limit the amount of damage that occurs.

Have a contractor assess the damage inside and out and provide you an estimate.  Compare this to your insurance deductible, which can be high near the coast and, as you mentioned, can be higher during a named storm.

One wind claim during a catastrophic event should not cause your insurance premiums to go up, but if you have had multiple claims in the past 5 years, the frequency of your claims could cause an increase.

The reason I do not advise you to call the insurance company first is that it will be entered as a claim on your policy, even if you ultimately do not receive any money from the company.

I hope this helps.  Good Luck!

Hi Skylar - I'm not familiar with pricing in your region, but contacting a trustworthy Independent Insurance Agent in your area will help a lot.  Being Independent means the Agent can shop lots of carriers in order to find the best rates and coverages for you.  Try contacting Jason Bott.  He has helped out a lot of Investors in your area.  Good Luck.

@Jason Bott

FInd an Independent Agent in your area and tell them what you need.  Since Independent Agents don't work for just one carrier, they have the ability to shop many carriers for you and they know which ones are interested in short-term rentals in that area.  Try calling Connie Sandoval with Collective Insurance Solutions in Palm Desert.

Seth,

I recommend contacting @Jason Bott, an Independent Agent who works that area and can help you find coverage that might be more affordable.

I'm assuming you're asking specifically about a Dwelling Fire (Landlord) policy.  Here's what to look for:

The "good" policy for a Landlord in Texas called a DP-3 (DP-1 and DP-2 have limited coverage).  A DP-3 policy is going to provide the most complete coverage for the structure, but contents coverage is an addon (unlike a homeowner's policy).  A good policy will also offer:

- Liability coverage of at least $300k,

- an endorsement that will pay your rental income ("loss of use") should a claim displace your tenants,

- liability coverage for wrongful eviction, invasion of privacy, etc., 

- coverage for slow seepage and leakage (especially since tenants don't always report problems right away),

- in our area (Houston and the gulf coast) you also want to consider the pros and cons of a 1% vs 2% deductible for wind and hail claims.  A 1% pro would be less out of pocket for a claim, and a 1% con would be a higher premium.  

As I always suggest, contact a local Independent Agent that is familiar with real estate investments and has the ability to advise you on carriers and rates specific to your area.  

Please let me know if you'd like clarification or additional info on any of this.

Sherry, to hear that the quote doubled makes me think that the company you're with is not interested in selling landlord policies. When an insurance carrier does not want a particular type of risk, they usually do not say "no", but instead raise the premium so high that customers just take the business elsewhere. In the case of landlord policies, it's probably the tenant liability they do not want.  

Hi Sherry,

It's not as simple as asking which company has good rates. They all have different "appetites" and will give good or bad rates based on such things as structure age, roof age, distance from coast, etc. It is best to work with an Independent Agent in your area who knows the regional appetites of the companies.

Good luck!

Hi Sandhya,

Roofs are the biggest sticking-point for property insurance companies.  None of them want to cover an old roof, especially if it has already been patched.  Without replacing the roof, I'd say your two best options are asking for ACV (Actual Cash Value) coverage on the roof, which will only pay a little bit in the event of a claim, or ask for a wind/hail exclusion, which will not pay anything in the event of a claim.  Premiums should be pretty cheap doing this, but you have to accept the risk involved.

If you replace the roof, many companies out there give discounts that can amount to several hundred dollars per year for a new roof.  Either way, I would suggest finding a good Independent Agent in your area to discuss your options.  They will be able to shop many companies for you and make sure you're properly covered.

Good Luck!