All Forum Posts by: John Mocker

You should be able to purchase the Flood policy separately.   Your state farm agent should be able to access NFIP or they may participate in the write your own.  I have not dealt with any of the non NFIP flood policies that have popped up.   If you do a google search you may find them (at least one was in FL).

Mark,

I can tell you that in our market area, CT NY NJ MA, we have both owned and rented houses insured at replacement cost regardless of age.   Some companies may not write over a certain age or they may have special requirements if the house is built before a certain date.  For example, several companies will not write a rented dwelling built prior to 1970 without a lead safe certificate.  Other companies require that houses built more than 25 yrs. ago have updates to the electrical, plumbing, roof, and heating.  I even wrote with one company with a special program just for pre-1930 house and they provided Guaranteed Replacement cost coverage for the building. 

So, in this area we can write Replacement Cost on 50+ year old buildings.  I do not know if Allstate has their own rules against it or if the State of MI does not allow it.  But it is not a rule in the industry as far as I am aware (I've been in the business 30+ yrs.), that a house over 50 yrs. old has to be depreciated.  

**You can call your state insurance dept. if you want to verify if there is a state law that requires depreciation on the 50+ yr. old houses.

Matt,

If the houses are Legal 3 family buildings they should be insurable under a "Dwelling Fire" policy.  That type of policy is used for 1-4 family houses rented to others.  We have been told by multiple companies that the losses are normally greater on the 3-4 family houses verse the 1-2 family houses. 

I think you need to get quotes from multiple companies (that may require multiple agents or one agent that represents a lot of companies).   You want to request a comparison with the same limits you have and then a quote with any changes they recommend.

Because of differences in age, location, fire protection, limits, etc. you may find that splitting the two houses to different agents/companies may result in best rates but if its close I recommend putting both with the same company. 

Michael,

We have several Markets for the Vacant Dweiling and I suspect that an agent out there can also get multiple companies to quote.   What you have to watch for is "What is the Minimum Earned Premium".   Ideally you want no minimum premium so you get the most refund.  That is rare.   The most common is 25% of an Annual policy (or equivilant in shorter terms).  I have seen some companies that have very good rates but the policy is Fully Earned (means no refund no matter when you cancel it). 

Mark,

You should contact your agent.   The payment for the Remediation work should be coming from the Insurance Company as part of your claim payment(s).  They should be the ones determining if the work was done to their satisfaction.   Also, if you agree to hold the Remediation company harmless you may be stopping the Insurance company from going after them later.  It may cause you a problem if the Insurance Company has not agreed to it. 

Nadav,

The type of coverage you should be looking for is:

Property -

Building covered for "Replacement Cost"  (Actual Cash Value is the depreciated cost and that can lead to deduction for depreciation on even a partial loss)

Special Form coverage (also know as "All Risk".  (Named Perils is less coverage)

Contents coverage if you own any furniture, appliances, etc. in the building.   Again, look for Replacment Cost coverage & special form.

Loss of Rents/Business Income coverage should be included. 

Coverage for detatched Structures may be needed if you have any outbuildings

Optional Property coverages that you may need are:  Water Backup & Ordinance & Law

For Liability coverage, buy the most the company offers ($500,000 or $1,000,000) and consider an Umbrella policy to give additional coverage if the Liability coverage of the primary policy is exhausted.

There will be other coverages that you should get depending on the properties, location, etc. and a good agent can discuss those with you

Nadav,

Its hard to say if the rates are competitive with out knowing more.  You should contact a local Agent with multiple companies (an Independent Agent) and ask for comparisons.  They will want to know:

- locations (need that to determine fire protection)

- Age, Sq Footage, current limits

- claims history

- dates systems (Electric, Plumbing, Roof, Heat)

- any burglar or fire alarms

they may need

- do the tenants have pets

- are there in ground tanks

- who the current coverage is with and when it renews

- tax id for the owner (FEIN for corp/LLC or SS # for individual)

With that info, it may be a quick answer as to whether or not your current carrier is competitive or they  may need to rate it up.

John,

What Jason told you is correct, there are companies that will endorse Backup of Sewers & Drains on to a policy.  Most companies will add coverage up to a particular limit that you will need to specify or chose (ie. $5,000 $10,000 etc...).  You need to make sure the new company is providing enough coverage.  One of our carriers that I think writes in MI has the coverage but only up to $5,000 (not enough).

Flood is a stand alone policy.  It can be from the National Flood Insurance program (NFIP) or companies authorized by them ("Write Your Own" carriers).   Recently there have been a small number of private insurance policies popping up.  I have heard some good things about the rates with these new carriers.  Need to check to see if your Mortgagee will accept a none NFIP company. 

Glen,

The question of whether or not to own the property as an individual or in LLC/Corp. can have multiple answers. From a strict risk transfer, you would probably be better served by the LLC ownership. You will still want to have adequate Liability (includling an umbrella) but the LLC generally protects from the claimants going after your personal Assets. From a strict cost of insurance coverage it will normally be cheaper that way. So, depending on what is your primary concern, either the accounants or the property manager may be correct.

Mark,

Without all the info on the claim and why the "upgrade" might be needed it is had to help on this.  I will try based on what we normally see in similar losses.

If the water itself or getting access to the areas behind the ceil & walls caused damage to the electrical wires or other parts of the electrical system the policy might provide coverage.   Generally, Insurance Policies will cover replacement with the same kind and quality that exists (may or may not have a deduction for depreciation).   If that is not possible due to the existing materials not being available, they will usually use an equivalent. 

If building codes require the upgrade of the wiring or electrical with more expensive components the company would normally not pay that difference.  There is an Optional coverage on many policies called Building Ordinance & Law that provides additional coverage for the higher costs of rebuilding due to changes in the Ordinances or Laws.