All Forum Posts by: Parker Cox

@Robin Singh I am an agent and do a lot of work with Realtor's and brokers.  Your broker is doing his best to maintain absolute protection for himself.  Getting the brokerage added as an additional insured actually should not be a problem, its just the fact that your carrier now knows you are a real estate agent and likely driving clients.  

As @Joe Bertolino said, your broker may be avoiding paying hired and non-owned auto, but he may have you do it anyway, because if you get sued by a client, he as your broker could be drawn in on a suit even with Hired and Non-Owned Auto coverage.  

But, @James Cheung is using Mercury, which is the company I typically use for Agents as well.  They seem to have the best rates for agents, and don't require a commercial policy, but put an endorsement on your personal policy.  

Best of luck.  If you want any advice choosing a company etc.  feel free to PM me.  

@Account Closed There are a few variables here that determine the answer that best suites your scenario.  

First: do you have more than a few 1-8 rentals? 

if your answer is no, you should have no problem getting a landlord fire policy through your current homeowners insurance carrier and then your existing liability coverage will extend and you can add an umbrella for extra coverage on all the properties' exposures.  

if your answer is yes you should get a commercial policy that will cover your properties. Its a little more detailed than a homeowners extension, but it will provide you with coverage that is far more scalable as well as the option of listing an LLC or business entity as an additional insured. This policy is for those of us who are viewing their investing less as a hobby and more as a business and you can start it that way even with only one property if your goal is to grow long term.

Now, to address your question: How much insurance?

well that depends on your house: you should be insured for somewhere between $150 and $250/square foot for your dwelling value (using really broad numbers here, but whatever it would cost to rebuild is the goal).  Then as a landlord, do you have your own furniture, appliances..etc? if so you need contents coverage that adequately covers the cost of replacement on your items as opposed to your tenants.  Finally, you will want a loss of income endorsement: this will pay you for the lost rent during a time when damage from a covered loss means a tenant can't live there: it can come in increments of 6 or 12 months or longer.  

Without having more information, that is the basics.  There is more details depending on the home, HOAs, condos, renters, mortgage requirements...etc 

Feel free to PM me if you have any questions or would like any advice picking an agent or carrier.  

Best, of Luck.  And remember when it comes to insurance, cheapest is rarely the best, but the same goes for the most expensive.  Make sure your agent can give you a full outline of benefits and gaps before you settle for cheap or pay to much.  

@Matt Smith 

Do you want the rental in driving distance? because the Northern Sacramento Metro-like Yuba is a cheap/good value multi family area, or Riverside can both be similar in price, and more importantly value for your dollar.  

And hey, if none of these options work...you could always buy a dog house in San Fran! Word on the street is that even their appreciating at 10%/year+.

Sorry, I should have put it in this thread, but I put a more concrete detail invite from this thread here:

https://www.biggerpockets.com/forums/617/topics/259344-bp-meetup-coming-this-january-16th-to-central-san-diego?page=1#p1695560

@Alex Chen as an insurance agent in Ca.  I think your agent is walking you down the right path.  

I insure more than 500 units with REIs and in almost every case I have seen a single LLC with GL and a Commercial Umbrella will be enough basic structure/protection to build on as your portfolio grows and changes.

But, it comes down to your risk aversion: many people in your position (1-8 rentals) have their rentals attached to their Homeowners insurance and then have a personal umbrella for extra protection.  But, if you dont have a homogenous portfolio, ie a 1 million dollar commercial building vs 3-50k SFRs, you may want to have stronger protection or separate LLCs because of the unique exposure differences as well as asset loss potentials.  

Ultimately, if this is going to be a business more than a hobby, I suggest setting up at least 1 LLC (though in my experience I have seen attorneys suggest that the LLCs are for more similar properties: like 1 for your california properties and 1 for texas....etc)

Then get a GL policy at least and likely a $1-3 million umbrella.  The umbrella is gonna be in the ball park of $500/year and a small price for the protection.  

Long and short: there is no right answer here.  You need to determine where you see asset exposure and to what lengths you would like to go to protect yourself.  If you do pursue more insurance I suggest you read the fine print--don't buy just because it is the cheapest and make sure your agent has experience with investors who are not only your size currently, but also familiarity with investors who have scaled to higher heights because if you plan to grow, you need a proper foundation now or else growth will be costly and time-consuming later. as @Juan Carlos Quiroz Zolezzi says "all insurance policies are created equal" and neither are insurance agents...

Feel free to reach out with any other questions.

@Mark M. It depends on the scenario. Short answer is, listing as an additional insured, will be including the LLC under the insurance coverage therefore offering coverage. But, the details of why an owner as opposed to the LLC owns the property...etc will determine if the structure is in place properly.

@Daren H. I am a commercial insurance insurance agent and work primarily with Real Estate investors.  An umbrella policy is going to be very affordable for the extra coverage and though it may seem "over the top", that is why its called umbrella coverage.  

Your situation and your risk tolerance maybe quite different from others.  But, what I would say is at the end of the day, it is a small cost from a risk/protection perspective and in the event that a worst case scenario were to happen: death, serious life-long disability or injury.  Rather than having to sell your properties and potentially have wage garnishment for quite a long time, paying a bit extra for "over the top" coverage, in most cases makes a lot of sense.  

Don't let that be a worst case scenario sales pitch, its not meant to be, but its more like an understanding that though you may have rentals that for 20 years have no major problems (for example a new roof), meaning you feel like your cashflow is blowing away any Cap X formulas, with every passing year you are at a statistically increased (compounded) likely-hood that in the ever nearer future you will have to spend 10s of thousands wiping out your cashflow on a new roof (or whatever major problem).  

Insurance is a statistics game, thats how they rate your policies, and statistically speaking, with every property you have, new tenant, people over to your house...etc, you are diluting your protection and lack of need for greater insurance.  

Again, it comes down to your personal risk tolerance and risk aversion.  Is it worth it, it is a personal question for us all, but the greater number of properties, tenants...etc you have have, the greater exposure to crippling scenarios you have.  

Best of luck

@John Arendsen I would be happy to get together and discuss some of this stuff. Do you attend any of the REI groups in SD county? The SDCIA creative investor association meets tomorrow night in mission valley at 6pm

@Tim Wright Welcome to BP, if  you haven't yet setup your keyword alerts yet, be sure to do so, so you can be kept up to date on all the threads that relate to your interests.  Also, listen to the podcasts...they are worth their weight in gold (probably even the weight of your Iphone).

Best of luck, and never be afraid to ask any questions at all, you would be amazed at the connections and informations that are waiting just across the keyboard from you on this site.  

@Kevin Fox I am very interested in attending. I agree with Justin R. His current project would be a fantastic view for a rehab and unique rental/value add arrangement. I could also add value for any insurance questions. I am an independent commercial insurance agent and REI is my primary focus. Please keep me updated on logistics and if you need any help organizing, planning, setting up etc...PM me or call or email and I am happy to lend a hand in anyway I can.