Insurance - who do the slum lords use? - Posted by Tracey

Posted by Andy on December 01, 2005 at 15:33:09:

Tracey, what state are you in?? As an insurance agent myself, I must advise against anything but full disclosure!! Failing to mention certain things, could result in a claim or coverage being denied.

If your agent only has one company (American Family) to work with, that could be the problem.

Here are a couple of companies that will insure just about anything and do it reasonably. Keep in mind that some if not all of these carriers may not be available in your state or area.

American Modern, National Security, Foremost, Auto Owners.

Don’t be shy…ask the other landlord who he uses. It could be a situation where he and his agent are providing a great deal of info about the properties to the prospective company and he’s getting a good rate; I would encourage you to do the same! Or it’s possible his agent is appointed w/ a small carrier that specializes in low-value dwellings.

Insurance - who do the slum lords use? - Posted by Tracey

Posted by Tracey on December 01, 2005 at 15:13:52:

We’ve got 7 properties insured with American Family and we don’t want to be part of the “family” anymore. We’ve been using them for about 5 years, we’ve got multiple policies and they are raping us cost wise, and nit-picking me to death about incidental crap that makes no sense. Long story short, I don’t think they want to insure 2 of the properties for whatever reason, so they tell me something needs to be addressed, then when I fix it they come up with something else. Our agent has lied to the company about various things in order to make the policy more attractive and get a commission. We’ve made attempts to move the policies, but when agents or brokers hear that even though we’ve replaced fuse boxes with breaker boxes, ran new wiring to key areas such as (stove,refrigerator, microwave, computer areas) and “lightened the load” on individual areas by adding more breakers, and removing all visible and reachable knob&tube wiring, but we didn’t gut the entire interior to replace un-touched knob&tube inside the walls - they won’t write a policy. Our houses are in 100X better shape than we we bought them and somebody had insurance on them in their pitiful state of disrepair for years before we bought them. I look around and all over town, there are run-down little rental houses, and old nasty looking houses divided into 3,4, and 5 apartments that I know for an absolute fact the owners have not addressed electrical issues as well as other safety concerns - but they are insured - one guy just had one of his burn to the ground, and he’s got 50-something more scattered all over town in just as bad of shape and multiple families crammed into most of them. Who do the slum lords use? If they can get insurance on that kind of crap I surely can get a reasonable policy on nice rehabbed houses. I’ve started asking around with no result. State Farm Insurance won’t touch a house with any amount of knob&tube, I question whether our company was lied to about it by our agent. But there are hundreds of houses all over town and they’ve been bought&sold several times over the past 5-10 years and I’m trying to find out who the buyers are getting to insure them.

Our agent just notified us 4 days before they were going to cancel the policies on these 2 houses so we’d be in a pinch and have to buy this 3 month (3 times the cost) policy he offered because he knew we couldn’t find coverage anywhere with short notice - he might have a good Christmas on us this year, but as soon as I can find reasonable coverage EVERY one of those policies is gone!

We bought another place a year ago, a historical duplex completely rehabbed. He wrote the policy, it was for more than we paid for the place, 8 months later we get a cancellation notice from American Family stating that they didn’t think we had enough coverage and to continue we had to pay more - THEY just wrote the policy 8 months prior!! why didn’t they write it correctly? And isn’t having it insured for cash payoff of more than we paid sufficient? It is solid masonry, built in 20’s, you couldn’t get the darn thing rebuilt like it was if you wanted to, and it’s still not even covered if we have an earthquake!

Anybody got any ideas? We’ve tried agents and brokers no luck. Do we just not mention Knob&tube? That doesn’t seem right. 1 house has had 90% of all old wiring taken out, but I WILL NOT rip out walls just to replace untouched wiring when there has been no problems and I’ve taken every other possible measure replacing all reachable wiring, adding more lines and breakers to take stress off possible “overloaded” old lines.

Now they don’t like that a little out building on one of the properties I’m rehabbing has flaking paint. Flaking paint? When I get the more important issues addressed I plan to side it with vinyl, it’s not going to cause injury, I’d tear the darn thing down before I ever embarrassed myself by making a claim on it, and they’d never pay if we made a claim on it I can bet on that. Help!

Re: Insurance - who do the slum lords use? - Posted by jafon2k

Posted by jafon2k on April 14, 2006 at 24:48:13:

There is no real need to have to deal with knob and tube. If you have knob and tube you probably have aluminum wiring which can be a fire hazard.

Kill all old wiring by disconnecting at entry points of future rehabs. No need to pull out dead wires. Then run new cable throughout.

You can use surface mounted guideways that look like molding if necessary for the harder to reach areas. There really should not be any major problem rewiring since the age of the houses sugests ballon framing was used (attic to basement opening along exterior fram of the house.)

Lloyds - Posted by Marc Donovan

Posted by Marc Donovan on December 02, 2005 at 05:34:58:

Call around and find an agent that sells Lloyds of London. They will write anything. They will put a blanket policy on all of your properties. If you add a property, just call them and they add it to the policy. Ive used them for three years so far and no questions have been asked. And Im in Florida - insurance crisis capital of the world.

Re: Insurance - who do the slum lords use? - Posted by Lee Allen

Posted by Lee Allen on December 02, 2005 at 24:13:57:

Just ask the other investors at your local real estate investors association. If you don’t belong to one that I would recommend you finding your local group and joining them.

Re: Insurance - who do the slum lords use? - Posted by Greg(PA)

Posted by Greg(PA) on December 01, 2005 at 17:27:13:

I like Andy’s idea–ask the slum lords! Always good to know other landlords in your area anyway.

Re: Insurance - who do the slum lords use? - Posted by michaela-ATL

Posted by michaela-ATL on December 01, 2005 at 16:48:15:

Tracey,

I’ve never had that problem. Granted, I usually don’t have rental properties and I do major rehab, but I always deal with historic homes and try not to gut them, because any history buff buyer will prefer plaster walls to sheetrock walls. I always tell the insurance commpany, that I rewired the house, which is what i do. I know my electrician doesn’t pull out all of the old wiring. Have never been asked aobut it. I use State Farm and before that All State.

Michaela