All Forum Posts by: Donald Stevens

You are right. I was passively referring to the temptation. :) My humor is hard to get when I type it.

As to your other question about companies with higher deductibles, yes they do exist and are usually purchased by large investment companies and banks because they self insure the (smaller) claims. They are available to investors but can be hard to find since they dont advertise like Progressive or State Farm. If you find an agent that specializes in this type of insurance your chances of finding a policy that is the right fit for you greatly increases.

I hear this idea about self insuring all the time form my clients and I always tell everyone the same thing. Banks have more money than most and we help them with forced place insurance and insurance on their foreclosed properties. I assume (and yes I know what assume means, lol) they have great accounting minds and have determined complete self insurance is not profitable but partial self insurance to the limit you can afford is probably the best option. Your idea of raising the deductible as your account grows then increasing contributions to that account as you save more money is an excellent idea. I hope you don't mind if I steal it and share it with my clients.

My advice would be to look for agents who are online talking about property insurance and educating the public. Landlord or investment property insurance is a specialty and you would want to work with an agent that focuses on that line of business. It is more likely they will have more options and have a better understanding of the policies strengths and weaknesses for your situation.

Im suprised they tried to cancel you with only one claim.

You need to check your umbrella. It probably requires your rental properties to be insured at $300,000 of liability or your umbrella will not cover you. The umbrella extends your coverage above a certain amount. If you dont have liability, the umbrella will not pay in the event of a claim.

Also you can buy a $80,000 policy with a repair cost or a functional modified replacement cost policy just not through American Family.

There are companies that will give you liability only. Off the top of my head I know one company that offers $1,000,000 in coverage for $.21 per hundred of property value (doesnt have to be replacement cost either). There are other companies that run about $300 or less per property regardles of value.

Stay insured while you are setting some money aside. To me the question is not whether or not self insuring is a good idea, its if it is the most profitable idea (I'm guessing that is the point). How much do you lose by having $30,000 sitting in an account waiting for a claim instead of using that money by purchasing another property to generate income and appreciation (hopefully).

Our agency specializes in Detroit landlord insurance. We will write one or a thousand and our policy does not need you to change your home and auto.

Seems like flood and earthquake insurance would protect your investment if the deal is right. If you were in an area that had constant brush fires would you make sure your home insurance was current? Seems like this is a great example of why insurance can be so crucial to protecting your investment and saving you from financial devastation. It does take money from the bottom line but an insurance policy premium is easier to manage and budget than a catastophic event swallowing up your livelyhood.

Sometimes it helps to work with an insurance agent who has decided to make investment properties a niche in the agency. We usually have more awareness of what insurance companies will write your policy and we are constantly looking for new companies that offer policies that fit our insured's needs.

If you are looking to protect yourself from a liability claim, then you have to do as much as you can to create layers of protection. Anyone can sue anyone for anything so there is no such thing as absolute protection. There are some things you can do to limit your risk.

Have your tenant get renters insurance for two reasons. The first is most renters insurance policies have a fire legal liability limit. That means if the tenant is the cause of the fire to your property, you can recover your loss against the tenants policy. The second reason is because if someone is on the property is injured due to negligence on the tenants part, the attorney has a policy he can go after in litigation. If the tenant doesn't have a policy the attorney is going to look for other parties to be held responsible. Tenants are generally noncollectable, so a landlord makes a good target. Some landlord policies give a discount for your tenant have renters insurance because of the reduced risk to you and your insurance company.

Forming an LLC or Corp does give you another layer of protection. This doesn't guarantee that you as the owner of the LLC can't be sued but it does add another layer of protection which makes it harder for you to be personally responsible.

An umbrella policy is always a good idea if you are concerned about your liability risk. An umbrella extends your underlying insurance coverage up to the amount you purchased. In other words you property may have a 300k liability limit and the umbrella would have 1 million. Anything above 300k would be covered by the umbrella. It is usually less expensive to extend coverage with an umbrella and it also adds gap protection to cover areas that may not even be covered by the umbrella policy. Most personal umbrella policies cover not only your investment properties, but also your home, auto, boats, motorcycles, and stray golf balls on the course.

When it comes to landlord policies like anything else I always recommend working with someone that knows the risks and products that are available to protect you.