All Forum Posts by: Tim Norris

@Matthew Hammond. There are carriers/Programs that waive co-insurance. Your agent likely just doesn't have access to them.

It is really not an issue of "either/or" as an umbrella and an LLC are/could be created for different reasons. Think of the LLC and other work you may do with legal and financial advisers (such as attorneys and accountants) as your "castle walls and moat" around your assets, personal and otherwise. Think of the insurance you secure as an "archer in the watchtower". In other words, the walls and moat should be your foundation as it pertains to protecting you/your assets. The archer (insurance) won't pick off every bad guy that tries to get in, so having the walls and moat is vital. Think of them working together not in lieu of each other. Hopefully this helps!

David Beard Though not the most scintillating reading, your policy has a pretty decent explanation. Have the agent point it out. Different items depreciate at different "rates", too. It's tough to calculate it before a claim, because it is levied against that which is damaged.

We utilized AMIG (American Modern) for awhile, but they started increasing the required coverage to levels that seemed unrealistic relative to the "real" values to repair/rebuild. They also exclude theft coverage on vacants (not that most insurers don't these days). Foremost is a solid insurer, but their rates are usually higher than market in most geographic areas.

As to which Aly references, the HOA should have coverage for the structure. The landlord policy you need should cover the "walls in, floor up, ceiling down--fixtures, wall and floor covering, etc... Take note of the HOA's by laws related to which party is responsible for "inside the walls". I have read some by-laws that the owner is responsible for burst pipes, etc... and some where the HOA is...worth checking before you close...

If your LLC owns the property, it should be the named insured, not the additional insured.

As a general rule, carry the amount of coverage that is relative to what you would do with a property in the event of a "large/catastrophic" loss. In other words, if you would not rebuild, carry sufficient coverage to offset the "economic" value (including mortgage, etc...), but avoid claim penalties by either carrying enough coverage to offset co-insurance requirements---or engage with an insurer that offers coverage without. If you would re-build after a loss, carry enough coverage to sufficiently do so. Understand that the term "Replacement Cost" (RC) isn't "reconstruction value". An RC policy simply allows you to recoup the depreciation that is initially levied against a claim settlement, by making the repairs.

There are Programs/coverages that can accommodate what you describe, too: no inspections, all locations (even owned by different entities, in multiple states) aggregated, etc... ; )

CT---Joe nailed it. Thanks, Joe!

Hey Mehran!

As it relates to asset protection strategies, think of the work you do with a legal adviser who, upon considering factors such as net worth, estate planning issues and taxation will offer advice regarding entity and ownership issues. I believe this is your "castle walls and moat" around you/yours. Think of the liability insurance as the "archer in the watchtower". The entities you create (LLCs, trusts, etc...), work symbiotically with the insurance coverage. How much is enough? Who really knows, but keep in mind that your "personal exposures", such as your vehicles, home, etc...(assuming you haven't exorcised ownership via trust, etc...), are/should be segregated from your business exposures.

All that stated, I carry $500k on our personal vehicles and personal liability (homeowner), and $3MM in a "personal" umbrella. Frankly, the umbrella, at $230/year is worth it at that limit. We (partner) carry $1MM over the properties we own via LLC. No "business" umbrella. Are these limits sufficient? Again, who knows, but they are in my mind, at least. Statistically they are, as most liability claims are under these amounts.

Really, your asset protection strategy should start with a versed attorney, include your CPA, and possibly your financial advisor. Figure out how to own/control what you have, then make a call, in your opinion, how much insurance is enough. Hope this helps!

Tim

Definitely. We know of one that you only pay for month-to-month, and includes liability. Cost is only about 10-15% higher than for an occupied location.

Andrew (and Brandon)--- the challenge to which you allude (in my guesstimate) is that the insurer is placing coverage as if the location is occupied fully and giving you a short time window to make it actually so. There are insurers that will accommodate the scenario you describe by offering coverage while "under renovation". The rates charged should not be much more than for an occupied dwelling. Hope this helps.