Rates are largely regional in nature. It will cost more on the east and west coasts, than in the midwest, as a general rule. MOLD is a major issue when determining cost in property coverage today. Fortunately, it is not that much of a problem in my area, but in areas where it is, the rates are reflecting this.
My rates in Ohio are no where near the 25K number you were quoted. While my rate is sort of convoluted, due to covering so many different things, my guess is that my rate for 1m liability is around 7K, or less. I know that I just added an additional 2m in commercial liability umbrella coverage for about 3-4K.
These are stab in the dark numbers, but in he ballpark for my location. You need to shop the rates, although in todays insurance market, where companies are mandating that their agents reduce their clients by 15% or so, (sorting out the dead wood to enhance profitability), rate shopping is hardly very competitive. Many agents/companies throw out a ridiculous number and if you bite, so be it. You may need to rely on referrals to commercial agents who want to write new business, in order to get a competitive or accurate quote. Keep in mind that not all agents want, or are able to provide a quote that will win them business, due to the company mandates.
How do foreclosure folks go about getting property insurance for foreclosures? There is a vacant property not too far from me that I’m considering buying at the auction. I talked to my local insurance agent about getting a policy for the property. She told be it would have to go to underwriting and be inspected and would take around 2 weeks. This will obviously be a problem since there is no access to the inside of the house and I don’t have two weeks until the auction. I’m assuming that foreclosure investors either have some alternative method of securing insurance or else they just hope the building doesn’t burn down between the time they buy it and can get a policy in place.
I had this same question today. Builders Risk Insurance seems to only apply when building or rehabbing. What about if you are just flipping it but couldn’t double close? Meaning, you are not doing any work to the place but just turning around. You want to be protected during that empty time. My agent (for my house\car) didn’t really know and neither was my banker sure.
The Builders Risk Plan that Stew mentioned (Zurich Ins), is simply the name of the subsidiary of Zurich Ins, which provides coverage and should cover the structure during your holding period, but has NO liability coverage. Liability coverage comes from your business liability policy, which doesn’t cover the structure… only loss from liability.
Clear as Mudd, right. Anyway, be sure to find a good comm’l agent who can write/broker coverage with Zurich Ins, get it set up and then buy the property. In the reverse order may find you w/o coverage of the bricks and mortar.
You will need to get the Zurich Plan in place first, before adding any structure for coverage. This may not be so easy to do all at one time.
Yep, I think you are right. When I bought at the foreclosure I had to do rehab work. I guess you could buy a Landlords policy from your regular agent. I think that is what I would do. That way I am covered in case it burns down. However, Allstate policy states that the property cannot be vacant for more than 90 days are else the policy is voided. Since I had a property that I intended on flipping that I couldn’t and became a landlord, I feel comfortable doing this.
JT,
I’m running the liability gauntlet right now. The first agent quoted me 25K a year. Sounds out of line to me. Any ball park idea what say, a million in liability coverage should cost?
Thanks, Lyal
Re: foreclosure property insurance? - Posted by TKP, Houston
Posted by TKP, Houston on July 07, 2003 at 18:15:31:
You need an agent who is authorized by the insurance company to issue binders. Properties i buy at foreclosure are covered the instant i call my agent, which i usually do the same afternoon. TKP, Houston