Posted by Auctioneer on August 08, 2011 at 18:16:26:
Tim, I totally agree. Apparently I was not clear enough on that issue. I can afford to self insure the MH but not the Liability. I have $1 Million of liability coverage on my stick built rentals for about $45 per house. That policy will not accept Mobile Homes. My MHP has a seperate Liability policy but it’s limit is $500k per occurance for the whole park. I am looking for Liability only coverage unless I can find 20 - 25k & decent Liab coverage for around 350 - 400/yr. I have discovered that most of these mh policies do not cover the HVAC outside unit. We just put a new pkg unit on it that is worth more than the MH itself. Thanks for the comment!!!
Insuring Rental MH question - Posted by Auctioneer
Posted by Auctioneer on July 27, 2011 at 13:10:20:
As some of you already know I have a MHP and have bought and sold within my park but have never held a Mobile home as a rental - until now… (times have changed).
My question is about insuring these units. Those of you who hang on to these as rental property… What do you do about insurance? I have obtained a few quotes and they all come in at about $600 annual premium to insure a 1987 14x66 2/1 Festival which provides 25k of coverage and 100k liability. I have about 15.5k in this unit. The premuim amount is more than I pay for stick built single family homes that I have 100k in not incl. land. Is this normal? I would actually self insure the unit except for the liability coverage. I insure my other rentals with 1M of liability coverage but that master policy will not except MH as well as older homes, etc. The MHP has liability of 500k via a seperate policy but they do not write single MH’s.
The liability coverage is only $25 per year but they will not issue without regular coverage. Any thoughts on this? It just seems high to me…
Thanks Tony, Shawn, Bernd, and BB… good info!!! - Posted by Auctioneer
Posted by Auctioneer on July 28, 2011 at 08:17:34:
I will follow up on these leads today. My property mgr will be impressed as I wrote the above from her laptop at her desk. We were stumped and I told her that I knew just who to ask!!!
To clarify a little bit. I am in TN. The MH I speak of is not in my existing MH park. I bought 6 lots in a rare MH subdivision at a Bankruptcy Auction for $1600 a pc. We closed last Sept. They are in N. GA which is about a 30 minute drive. When I bought them I really did not have a plan for them, but I felt reasonably sure based on experience that I’d figure out a way to make money. It turns out that I sold 3 of the lots right away (Oct) for about $7000 a pc with 6k down and the rest financed for 5 years at 7.5%. As of right now I have recouped all the cash I invested for all 6 and continue to collect P & I. As for the remaining 3 lots - No, such luck. One of the remaining lots is not very good due to setback regs. I will be lucky to put a 50 footer on it. I’m not really sure but I’m thinking of moving a 40’ fema unit on it and selling the camper (not considered a MH) and collecting lot rent. I would save a tremendous amount in moving and setup.
The other lot is the best of the 6. I had sold it but the neighbor has always treated it as her extended backyard and convinces buyers that it is not a good deal. I’m fine with putting a rental on it. Not out of vengence, but I’m sure she will wish she could reconsider my offer to her. I’ve kept the relationship favorable despite her running off my buyers. I guess she thinks that I took down the sign and plan to do nothing with it forever. Who knows…
In a nut shell, I decided to put a Lonnie deal together and collect lot rent but no good prospects. However, we did rent it in no time to a very qualified family that may be buyers down the road. Hence, I have my first MH rental collecting 500 a month. Not a bad return!
Re: Insuring Rental MH question - Posted by Shawn Sisco
Posted by Shawn Sisco on July 27, 2011 at 14:35:58:
I have been using King Agency - Omaha NE; I am located in MO and in Kings territory. They are affiliated with a group of agencies/brokerages known as AIA. They are truly an insurance company that specialize in MHP operations. If I recall correctly- you are in TX - if so Kurt Kelly (I don’t know the name of his agency)handles your area.
I have $350,000 of MH’s insured based on my cost for $1950 yr.
I believe that there is another affiliated group similar to AIA- But whatever agency that you choose,I believe it is the first thing to check out- do they truly know the MH biz?
Overall, I have closed many gaps in coverage and I now spend far less in premiums.
Tony, Do you know if foremost will cover outside air
conditioning units?I had one striped and gutted last
night (fri) a 3 ton package unit…we’re looking at
$2800 wholesale to replace it…My GPS I guess didnt
work.They didnt take the entire unit, just the coils
and copper
Re: Insuring Rental MH question - Posted by Tony Colella
Posted by Tony Colella on July 31, 2011 at 07:56:22:
I don’t know about Foremost but I do know that Farm Bureau would not cover my stolen heat pumps because they home was a rental. Had it been my own owner/occuppied home they would have.
Re: Insuring Rental MH question - Posted by shawn sisco
Posted by shawn sisco on July 31, 2011 at 07:33:17:
Joe, a new 3 ton split system - a-coil, line set &
condensor currently sells for $1220.
As for insurance…I would advise against a small claim
like this; it’ll likely cost you far more in increased
premiums that you receive, what with deductable,
depreciated value.
Posted by Auctioneer on July 31, 2011 at 06:43:23:
Joe, Sorry that happened to you. It never even occured to me to make sure the policy covers the outside unit. So thanks for that heads up. At least in my area, it makes sense that they would only take the copper and coil because to scrap an hvac unit requires an HVAC License. And that brings me to a question. You mentioned other people around your MH had whole units stolen. Could someone have seen you putting the GPS in that unit?
I had the same experience as Tony did with Farm Bureau. We had a unit stolen on a dw on land a few months ago and they would not cover it. I incorrectly assumed the unit was covered and the agent never said theft wasn’t covered. Lesson learned after forking out $2,500 for a new unit installed.
I am switching carriers and believe State Farm will cover dw’s on land and cover theft.
I’ve had copper stolen before. Sheriff came out and said best solution is to put up a game camera (like for hunting) to try to catch the crooks. Amazon.com had decent ones… I have yet to try it.
I have Foremost for my units and I believe they cover theft… but that’s just from me trying to remember their speech they give me everytime I add one… I’d like to find something cheaper. Typically for each home it’s about $300/yr with $1000 deductible to insure for $20k. I looked up AIA online and asked for quote… no response. Googled Kurt Kelly - insurance guy from TX but can’t find contact info. I’ll try calling AIA tomorrow…
I recently used Kurt Kelley with Mobile Insurance in Houston, Texas. I have 5 mobile homes valued at $120k insured for about $2,200 per year which have a $1000 deductible and $100k in liability coverage. They added a $1m general liability policy for an additional $800. I had my policies with Foremost. Kurt reinsured me with Foremost at a lower price and added an unit which Foremost refused to insure because it was too close to a river. It is hard to compare insurance policies because of complicated factors.
Shawn, it sounds like you have a much better deal than I have. Can you break your coverage down like I have above so that I can comapare. Thanks.
Re: Insuring Rental MH question - Posted by Shawn Sisco
Posted by Shawn Sisco on July 28, 2011 at 14:04:14:
BB, EMC is the underwriter on this policy…as I understand it the brokerage/agency/group shops for underwriters state by state because state laws (and thereby risk to insurer) differ. Also, distance to fire department, losses in the county, condition of park and a bunch of other factors come into play.
As for my policy: $1000 ded. per MH, Also I should mention that this MH coverage is in conjunction with overall MHP coverage.
Please reconsider being self insured. Its one thing to think that you can afford the loss of the home. Its another to have an accident happen on your property that you may be liable for and loose more than you expected. I was self insured on an old single wide for a while because I was too cheap to buy the insurance policy. After hard lesson, I will never be self insured again. I have my policies with American Modern Home Insurance Co. Just got a $21k policy on a 70’s model double wide for $328 annually.
Regards,
tim