All Forum Posts by: Donald Stevens

Well if you are doing structural changes or adding an addition to the property you can get a builders risk policy. So in some way you are correct. I was trying to be simple in regards to the question for the following reasons.

A builders risk policy is a course of construction policy which means as you add to the homes replacement value the insurance value increases. Some companies that write builders risk may allow a rehab property to be insured if the home is to be substantionally improved in square footage or gutting to the studs. We write both. We just dont write many builders risk policies because it is not a fit for a buy and flip or a renovation property to rent because of the reporting procedures during construction and the extensive underwriting to get the policy started. If your vacant policy offered the renovation coverage like some companies do you would not have to buy a seperate policy and you have less gaps in coverage. Each company if they are seperate may have different claim triggers, coverages, and exclusions.

I would also check the language of your vacant home insurance. Many vacant policies do not offer coverage if the property is being renovated because of the increased liability exposure. You should check to see if your vacant policy allows renovations. You could say thats what the builders risk is for but I would say the vacant policy may not cover ANYTHING and you are paying for a policy that will not pay. I am not your agent so I cant say that is the case. I am only stating that it may be worth looking into before there's a claim.

I forgot to mention a vacant home policy with renovations is less expensive than a builders risk policy. The $500 minimum premium is not unusual. I just wrote two vacant policies in Maryland. They both were being rehabbed and they were $110 each every quarter. Thats for the vacant property insurance and the renovations. Worth looking into in my humble opinion.

Yes there is. In the past insurance companies would write flood in nonparticipating flood zones. Those are areas where the community did not comply with FEMA requirements and did not qualify for the NFIP program. With the new elevation certificate requirements these companies are becoming more attractive to homeowners and landlords.

I think what you are referring to is the rates and coverage offered by different companies that offer flood insurance through the NFIP. All companies that offer NFIP offer the same coverage and rates because they are only servicing the flood policy for FEMA.

There is also the issue of liability. If someone were to sue you the condo policy would cover you up to the amount of liability.

An LLC can have several partners. That is why your personal umbrella will not cover your LLC. If they did then they would have to extend the coverage to all of the partners. Even if you are the only one you could add partners at any time so it doesnt fit. Your LLC is technically a business and what you need is general liability policy. You can buy one for $1,000,000 or more and it will provide you protection for your LLC. You can also buy an Umbrella for your business but they will require the business to have general liability as the underlying coverage.

That is an excellent question for your insurance agent. Different insurance companies have different rules, regulations, and coverages. As a rule of thumb the named insured is covered by the policy according to the policy coverages. If your agent cant answer that question you may want to find one that can. You dont want to find out when there is a claim.

The rate sounds pretty good. Just make sure if its occupied that you get a DP3 policy. Some agents write DP1 policies to keep rates down and the coverage is very basic. Unless your in a high risk area or you dont want coverages like vandalism, burst pipes, and wind driven rain then you will be fine.

All you need is a landlord insurance policy. The only difference with a duplex is there is a charge for a mutlifamily but the coverages are the same as a SFR policy. Find an agent that knows landlord insurance and it should be easy. We write them all the time.

A builders risk policy would be for a new construction home. They increase your coverage as you build the home. What you need is a vacant home insurance policy that also insures your renovations. An agent that specializes in landlord insurance can help you with that. We write them all the time so we know they exist.

The new FEMA requirements are that you need an elevation certificate if you are in a flood zone. If you do not have one then you get charged a higher rate. An elevation certificate will cost you between $300-$500 but will save you thousands a year. Also there are insurance companies that are stepping in and offering flood insurance outside of FEMA. They are A rated companies and are a good alternative.

We had a client who had an elevation certificate and it showed that the property was 10 feet below the flood zone which was going to cost over $3000 a year. We shopped with some insurance companies and got that rate under $1500 a year. Check your alternatives. FEMA can recommend you to an agent that writes flood. Ask them if they have alternative markets. Good luck.

The type of umbrella policy you are discribing is a personal umbrella policy. It extends your liability to, lets say, $1,000,000. It extends your liability on your home, auto, toys (motorcycles, etc.), rentals properties and a lot of areas you dont have any liability protection on any of your other policies. Some companies require your auto insurance to write the umbrella and there are stand alone umbrella companies usually offered by an independant agent.

You may want to buy a liability only policy for your rentals and remove the coverage from your rental properties. Its not an umbrella, it is liability. The difference is the company is only offering liability when it pertains to the properties and nothing else. There are also companies for investors who own 5 or more properties that will let you pick your coverages a la carte. You can have property only insurance on one, liability only on another one, and then maybe both on the rest.

My feeling is you have a special need that requires the attention of someone with experience, knowledge, and products that fit your needs.