All Forum Posts by: Kevin Hoag

@Ohad Folman

Insurance companies use a lot of different factors to calculate the annual premium. In Detroit the zip code is going to be one of the largest factors. The exact same home in different zip codes will have completely different rates. There are some zip codes in Detroit that certain insurance companies will not even offer a quote. This causes those areas to have extremely expensive insurance rates. Other than zip code your other factors that will play a large part in the rates are your credit score, your claims history and the properties claims history, Age of home and age of mechanicals, number of units, square footage, properties intended use(short term vs long term rental). If the rates you were offers are too high I suggest looking at some different insurance quotes. 

What insurance carries have you been quoted with so far?

Trevor,

When shopping for coastal insurance you will want to make sure to go to an independent insurance agent that can quote your property with as many insurance carriers as possible. Florida is going through an insurance crisis at the moment with somewhere around 15-20 companies this year that have stopped offering new policies. There is currently no telling what is going to happen to future rates with so many changes taking place. Let us know what you discover once you find a carrier with some decent rates. I am sure there are many others going through a similar situation.

Victoria,

All of what John stated above is great advice. To add to that you will also want to make sure to secure the property as soon as possible. Securing the property is typically a requirement in your insurance policy. This means board up any broken windows and doors. Someone looking to loot the property and falling through a weak floor could lead to a liability claim on top of the fire claim. 

You will also need to get a copy of the fire report from the fire inspection that was done by the fire station. This report will provide you with the potential cause of the fire.

Since you mentioned it may be arson you may want to consider filing a police report. 

Something to speak to your adjuster about is whether you have to rebuild/repair the damages or can you collect a check and sell off the property as is to a company that specializes in fire flip projects. 

Best of luck with everything and remember your BP Family is here to help.

@Greg Todrank one of my favorite insurance carriers to use for fix & flips is Foremost. However in Michigan depending on the zip code I have found that Foremost may not insure that area. If that is the case I would look into AU Gold or US Assure they both offer great builder risk policies. One thing to always ask your agent when shopping carriers using a builders risk policy is "how much of the premium is earned". For example a 1-3 month policy may be "100% earned" meaning you will not get a refund when cancelling. Some carriers will refund you a prorated amount down to the day no matter how long or short you use the policy. Always something to look out for if you plan to flip the property quickly.

@Reid Frohlich there are several companies that can place all 23 SFH on 1 policy. Depending on the number of units each apartment building has you may also be able to place them on the same policy as your SFH. I know Loyd's of London offers a great policy that has this ability. You can even place homes in multiple states on their policy and purchase up to 10million in liability coverage without the need for a separate umbrella policy. Each insurance company has their pros and cons so taking a look a multiple carriers will always be your best bet.

Praveen, as with all things this depends on your portfolio. If they are all 1-4 family units Foremost is a great company. They accept student housing and properties that are in pretty rough shape.

Congrats on the new purchase. I am not licensed in OK so you will want to confirm everything with your agent when getting your policy. Yes, It is common to first purchase a vacancy policy or a builders risk policy depending on the size of the rehab. Once your project is complete and you move in/rent the property out. You will then convert or cancel/rewrite into a landlord/homeowners policy. Landlord/homeowners policies only allow for 30days of vacancy before loosing/reducing coverage. During the rehab I recommend coverage on the home to be the homes ARV. This will protect your total cash into the home + profit if you had a catastrophe happen. I recommend maxing out your liability. You can add a comprehensive rider to your policy to provide yourself with better coverage. Deductible is up to you, typically 1k or 5k is what I see the most often. I have never insured anything in OK so hopefully someone else can help with that part. Insurance companies pricing is rated down to the zip code so it will vary location to location. Best of Luck,

Dealing with any utility company is always going to be a pain in the ***. So as the old saying goes "if you cant beat them, join them" I recently ran into a gentleman who showed me how to make up to 20% of my tenants gas and electric bills. I updated my leases so the tenants have to go through my gas and electric provider. I now have a back office website to manage and track my tenants utility payments and I make money off of it! Tenants utilities are now an additional income source to help offset my utility costs. If anyone would like to know more just send me a PM.

John, I am sorry to hear about your loss. It sounds like you did not purchase a replacement cost policy but purchase an actual cash value policy. You will want to review your Declarations page of your insurance to find out what type of policy you have. I would dig deeper into your policy before hiring a PA. They take a percentage of the claim and might put you in a worse position.That does not sound like a safe policy to have. ACV policies are barebone policies if not done correctly.

Sean, If you are just doing a residential rehab you can go to Foremost and purchase a vacancy rehab policy. This can offer you up to 1 mil in liability and will cover anyone working on the home. You will not want standard home insurance as that is not designed for rehabs or vacant homes. What you can look into is to see if your home policy will allow extended liability coverage to a second dwelling. This will allow you to get that additional 1 mil without buying an umbrella policy. Also as soon as you sell the home you know longer are responsible to carrier insurance on the property. In fact you no longer have an insurable interest in the asset to even carry insurance on it. Once you sell your done with that project and can move on.