All Forum Posts by: Owen Rosen
Owen Rosen has started 0 posts and replied 552 times.
Post: LLC Insurance and Taxation
- Professional
- Clinton Township, MI
- Posts 565
- Votes 224
Quote from @Marc Zak:
Anyone have experience on the issue of getting insurance on a property held in an LLC? I did a search on the forums and insurance seems like it could be a major problem.
Post: Multi Family insurance
- Professional
- Clinton Township, MI
- Posts 565
- Votes 224
Quote from @Simon Packman:
I have a 4 plex our premium sky rocketed to $8900 a year. I'm thinking about selling but thought I'd reach out to the community to see where I might find a reasonable price? I'm hoping for $4000 or less...
sent a DM
Post: California isn’t the only place where insurers are dropping homeowners
- Professional
- Clinton Township, MI
- Posts 565
- Votes 224
Quote from @Kelvin Lee:
After American Family dropped my multi-family coverage, I’m still struggling to find a carrier for my 1969-built apartment, with only three weeks left before the current policies expires. I spoke with State Farm, but they require plumbing and electrical panel upgrades just to consider reviewing my application. After speaking with several commercial realtors, I realized my frustration is shared by many. Others are also struggling to secure a carrier or are being forced to pay exorbitant premiums just to have their applications reviewed. Sadly, this price-gouging behavior has become the unfortunate new norm in the insurance industry.
There's a high likelihood you'll need a broker familiar with surplus lines. 3 weeks isn't much time - if you aren't working with someone already you need to get in touch with someone asap.
Post: Can't find commercial insurance for my small Motel
- Professional
- Clinton Township, MI
- Posts 565
- Votes 224
Have you tried a local independent agency?
Post: Property Insurance Question
- Professional
- Clinton Township, MI
- Posts 565
- Votes 224
Quote from @Michael L.:
Good afternoon BPers🫡,
Will property insurance pick up the tab on something like vandalism or does the policy have to contain some type of clause built in regarding this matter?
Most occupied property insurance policies will cover "vandalism and malicious mischief" but there are different forms of policies so you'll have to ask.
Post: Knob and tube wiring
- Professional
- Clinton Township, MI
- Posts 565
- Votes 224
Quote from @JD Martin:
Quote from @Kyler Tarr:
I am on contract to purchase an investment property in Ohio and the inspection showed the house has knob and tube wiring even though it was built in 1959. I had an electrician go out today to inspect and give me a quote to fix and should receive the report tomorrow.
I talked to several insurance brokers and they both said majority of insurance companies do not provide coverage on homes with knob and tube wiring due to potential fire hazard. There are some that provide coverage but of course the premiums and higher.
I wanted to see if anyone has experience with or owns any properties with knob and tube wiring and what I should do. I will ask the seller for a concession to replace the wiring, which could be $10k-$30k, but I have a feeling they will reject.
My question is do I go forward with purchasing the property and deal with the higher insurance and potential hazard or is it smarter to walk away? Any advise is greatly appreciated on the subject!
Thanks!!
I still have one house with some existing K&T. I have/had no problem getting insurance with it in place. I am in TN. The biggest hazard is generally the insulation falling off and overheating and setting something on fire, or arcing because of insulation gone and having the same issue. If the insulation is in decent shape and not covered by combustible insulation, and not terribly overloaded, it might last many more years. In the one house that I still have some existing, it's only on an overhead light circuit with no insulation around it, and I minimize the load on the circuit by using only low voltage LED lights.
Knob and tube is very difficult to insure. Under 100amp service - very difficult to insure. Fuse boxes, very difficult to insure, etc.
@Kyler Tarr it's good you haven't had an issue but you also mentioned your property has some knob & tube. Is your insurance aware of it? For instance, if it's a small portion and you indicated during initial intake/application that electrical is updated they wouldn't have any way of knowing. Most inspections are exterior only so insurance is going off of insured/agent application and any visual cues such as an outdated electrical meter.
Also, while it's been difficult to insure these things for many years now it's gotten tighter over the last 5 years in this hard market.
Post: Updated Insurance for renovated property
- Professional
- Clinton Township, MI
- Posts 565
- Votes 224
Quote from @Roger Flot:
Quote from @Owen Rosen:
Quote from @Becca F.:
Great question. I'm going to ask my insurance company. I'd be interested to hear how about this maximum appraisal potential is determined.
I would guess an older home might be more cost to insure? I also did a local renovation in 2022 bringing it up code. I was told by a local experienced investor that insurance companies will always go cheap with paying out to contractors in the event a property needs to be rebuilt.
All else being equal, yes, older homes are more expensive to insure than newer homes for a variety of reasons.
I guess from an "all things being equal" framework, what are the variety of reasons that an older home are more expensive to insure than newer homes?
1. The older the home the more difficult (and therefore expensive) it's likely to be to restore a home to pre-loss condition
2. Older homes will typically have systems that are out of date - even if only partially. For instance, plumbing might be updated but not every pipe. In MANY cases, an insurance company is insuring a home under the guise of it having updated features without knowing that some things are not fully updated. In many of those cases the lack of updates would not even be insurable if the insurance company was aware of it.
3. So, older homes have a higher frequency of claims as well as higher severity.
Post: Updated Insurance for renovated property
- Professional
- Clinton Township, MI
- Posts 565
- Votes 224
Quote from @Becca F.:
Great question. I'm going to ask my insurance company. I'd be interested to hear how about this maximum appraisal potential is determined.
I would guess an older home might be more cost to insure? I also did a local renovation in 2022 bringing it up code. I was told by a local experienced investor that insurance companies will always go cheap with paying out to contractors in the event a property needs to be rebuilt.
All else being equal, yes, older homes are more expensive to insure than newer homes for a variety of reasons.
Post: Updated Insurance for renovated property
- Professional
- Clinton Township, MI
- Posts 565
- Votes 224
Quote from @Roger Flot:
I was reviewing some renovated listings in my area and one indicated that even though the house was originally built in 1920, because of all the renovations bringing the house to current code, that you could get 2024 rates on insurance. I imagined that to mean that a 1920 home with no renovations would cost more to insure than one updated to 2024 specifications.
Is this something that is just "known" to flippers/renovators and I am just coming across it?
Does anyone know how insurance companies evaluate these properties and whether or not real value can be realized for insurance for renovation? Are there any guidelines or best practices (ie: rewiring such a property would be more valuable than updating insulation).
Is it something you need to ask the insurance company about to get, or is all this determined in the initial interview with the potential insurer?
I wouldn't accuse people that write listings to be knowledgeable in insurance. Often, they're not very knowledgeable in real estate.
You will not get the same pricing on a home built in 1920 vs. 2024 no matter what updates were made. If it is recorded as built in 1920, that is what the insurance will be based on.
The most valuable update with regards to insurance is the roof. Electrical next but mostly for eligibility purposes. Meaning no fuses, aluminum wiring, knob & tube, etc.
Post: Recommendations for commercial liability insurance provider in Texas
- Professional
- Clinton Township, MI
- Posts 565
- Votes 224
sent a DM