catch twenty two with insurance? - Posted by K Greene

Posted by Perry IL on May 02, 2000 at 22:34:30:

Thanks Jim,

I live in a town with a population of 15,000. Maybe a dozen insurance companies exist. Couldn’t get any one of them to insure my rehabs. This was about to become a MAJOR stumbling block to financing. Glad someone asked the question.

The fact that there is a company actively engaged in the business of insuring properties in this situation is encouraging.

I had been quoted a price of $1,400, plus some change, for an annual term, and then the company refused to insure the property upon learning of the amount of time that the home had been vacant. (Since Dec., 1992.)

Thanks Jim, I’ll track down Lloyd’s and post the results as they occur. Perry, IL.

Nice to commensurate with you in St. Louis, albeit in an all too brief encounter however. Airborne !

catch twenty two with insurance? - Posted by K Greene

Posted by K Greene on May 02, 2000 at 18:58:50:

Own vacant property in PA with contractor finishing work. Need fire policy and Liability … Will not insure due to vacancy. Looking for sale. Looking for an insurance company for investors. Thanks

Call your local independent agent and ask for Zurich Builder’s Risk… - Posted by Dealmaker

Posted by Dealmaker on May 06, 2000 at 19:08:20:

Policy. They have a “remodeler’s” program that 40 cents per $100 of coverage.


Re: catch twenty two with insurance? - Posted by Dave T

Posted by Dave T on May 02, 2000 at 23:20:22:

I bought a rental (3/2 townhouse) last December that stayed vacant through mid-March.

I explained to the insurance company that I would need three weeks to complete rehab putting me in mid-January, allowing for Christmas and New Year’s holiday downtime. If I started advertising in February, an accepted tenant would probably need to give 30-day notice to their current landlord, making the most probable date of occupancy on or about the first of April.

State Farm Insurance Company accepted this explanation and gave me a standard one-year landlord policy with $1MM liability and a six month vacancy rider. The vacancy rider only added $50 (fully earned) to the premium. My tenant moved in on March 23rd.

You need a Builder’s Risk Policy - Posted by Ron

Posted by Ron on May 02, 2000 at 22:57:56:

I insure my rehabs through an independent agent. She represents (among other companies) Zurich Insurance which sells Builders Risk coverage.

I pay $260-$300 per year (renewable for one additional year). This covers the property, but not the liability. The amount covered includes the house and the repairs and the expected profit. (If it burns down, I still get my profit.)

Each house has its own property policy. The insurance company offers this policy for exactly this situation. If I turn the house over in less than one year, I do not get any return premium.

As for the liability, that is covered on a separate policy (and a different insurer). An annual policy costs about $500 ($1 million limit) and covers up to three properties. I carry more than three properties at a time, so I have to pay an incremental premium of about $140 per property above three. This policy is a bit different than the property policy because if I sell a property and then add a new property, the new property is covered without additional premium (for the balance of the year).

Call some independent insurance agents and see who represents Zurich Insurance. This coverage is managed by a group called Homebuilders (or something like that) which is headquartered in Jacksonville, FL.

Ron Guy

Re: catch twenty two with insurance? - Posted by JPiper

Posted by JPiper on May 02, 2000 at 21:48:56:

You need to contact an insurance broker. Lloyds of London is a company that will insure vacant houses. Cost is around $350 for a 3 month period. The premium is fully earned (non-refundable).


Re: catch twenty two with insurance? - Posted by Glenn-OH

Posted by Glenn-OH on May 02, 2000 at 21:41:43:

Have you asked for landlord insurance? or just normal homeowners insurance?

Myself Also! - Posted by TC

Posted by TC on May 02, 2000 at 21:13:16:

Does such a thing exist?I would sure like to know also if you can insure a home while it’s under rehab and if so what direction can we go.

Re: catch twenty two with insurance? - Posted by ChuckP

Posted by ChuckP on May 02, 2000 at 23:16:29:

I have also heard of insurance for “completed operations.” Is this the same thing as the Lloyds of London policy? An insurance broker I was speaking with mentioned this to me.

Also, I have a number of houses in a LP managed by my C-Corp. My regular carrier I use for personal stuff won’t touch it with a ten foot pole. Are there any carriers you would recommend for landlord policies given this situation?