All Forum Posts by: Kevin Romines

Farmers is one of the few big boys that is investor friendly. They can do up to 20 home on personal lines even if they are held in an entity such as an LLC. They have very competitive commercial policies as well. They are kind of a hybrid in the market in that yes they are a captive company, but after Farmers looks at the policy, if they cant do it for whatever reason, then the agent is free to broker it to whatever carrier they want. Many agents have excellent outside lines and specialty lines carriers contacts. So you get the best of both worlds.

They also own foremost who has no restrictions on the numbers of homes you can insure with them. Foremost will insure an LLC or entity on personal lines. They have a hybrid personal lines policy such that you are allowed to schedule up to 36 properties per policy, with no restrictions on the numbers of policies you can have with them. This is very convenient for tracking purposes, just 1 dec. page and it also eliminates services fees on each individual property.

Farmers is one of the most investor friendly and ease of use insurance carriers out there as far as the big boys. They also own several other companies such as Foremost and Kraft Lake to name a few. I would at least get a quote from them.

Most insurance companies will not allow the tenants to use BBQ's on balconies or decks. This is done to prevent fires and or a claim. This is the job of the insurance industry to protect your assets via the policy and protect against claims. My guess is that you will find it difficult to find a policy that doesn't restrict this activity? Who knows, as soon as I post this, someone will have one to offer? Compare the prices on the two different policies and I bet you as the owner of the facility will decide to offer a safe place for the tenants to BBQ away from the buildings? Good luck in the hunt.

You should consider Dave Ramsey's method. Buy term and invest the rest. Our office is a Dave Ramsey ELP office. Most people will not need life insurance for their entire life, especially if you follow Dave Ramsey's methods. At some point your investments will have much higher values than the life policy you took out. At that point, do you still need life, or will your investments cover that need? Keep in mind that there is no one size that fits all, but if your doing research, look into Ramsey's methods and programs.

As far as tax free income, set up a self directed Roth 401K or a standard Roth IRA. if you hold them for 5 years or more and are age 59 1/2 then all withdrawals are tax free from that point on. A Roth can also borrow money and hold hard assets.

Insurance would be a big question for you?

I have a few specialty carriers that that I know of that will write the risk, however your existing insurance carrier will most likely not write it. I would put in the lease that they are responsible for carrying the insurance on the building with minimum specified limits. You need to be listed as a lessor and as a certificate holder. This will give you notice if their policy ever terminates for any reason.

Farmers tends to be an investor friendly company. The limit on landlord policies on personal lines is 20 properties. The house can be insured on personal lines even if it's held in an entity such as an LLC so long as the primary insured is a managing member of the LLC and they are listed as the primary insured on the policy. The LLC will be listed on the Dec. pages and as an additional insured. In the event of a claim, the check will be cut in the name of the primary insured.

Farmers also owns Foremost as well as Kraft Lake. Foremost is great with rental properties (very competitive pricing, you might be surprised) they also can do vacant and rehab properties. With Foremost there is no limit on the numbers of properties that you can have insured. They can also put all like type properties (vacant on one, dwelling fire 1 on one and dwelling fire 3 on its own) on 1 scheduled policy. This saves on service fees and will combine the documents into 1 set of dec. pages. It tends to be much easier to track that way. It’s also very easy to add or take properties off this policy as needed.

Kraft Lake is Farmers brokerage channel for its agents. Farmers is a bit unusual in that yes it’s a captive company in that the 1st shot on the policy has to go to Farmers or Foremost, but the agents are free to broker to any company after that at the discretion of the agent. So really, a hybrid in the market place. Worth looking at.

Why cant your agent write a landlord policy on a monthly billing until you have the tenants moved out, then switch it to an owner occupied policy on a 2 unit? If you cant get that done, do either a landlord policy through Foremost or at worst case a vacant policy through them as well and do a monthly billing. They have a minimum earned premium of $250.00 so at least it will be less costly?

I can only speak to how our company and other companies we represent handle coverage on this matter. The trampoline must have netting / fencing attached to it and around it. It must be listed on the policy and the premium can reflect the additional exposure to risk. Most insurance companies on a landlord type policy will require it to be removed and that the landlord issue letters to this effect. It can also be excluded on the policy.

Basically stated, if it is not specifically listed on the policy with coverage then you could be liable without benefit of coverage. The tenant has an insurable interest in the trampoline (they are the owner) you have an insurable interest in the property (you are the owner). If your insurance company allows it with requirements and if you agree to allow the risk, then I would require the tenant to also have a renters policy with specified minimum limits of liability coverage.

Keep in mind, that no matter what policy and endorsements you may have, it wont necessarily keep you from getting sued. If its covered under your policy, then the defense costs are paid by the insurance company. If they wont allow the risk, you then need to get it removed quickly and get your rental agreements amended.

Foremost (disclosure - a company owned by Farmers) writes these policies. They are reasonably priced and offer very good coverages. This is more of a specialty policy, so not all insurance companies offer it.

It depends? The 1st place I would look is to your own insurance company. I would ask them if they have sewer and drain back up coverage? Have them be specific as to what it covers and when? I would also compare that to the company and coverage that you mentioned above. I would also google that company to see what other people are saying about them? Sewer and drain coverage on a home policy or landlord policy typically starts around $35.00 for the year at $5000 in contents coverage and then goes up from there depending on the contents coverage? Not all companies offer this coverage on landlord policies, so you may need to ask around?