Rental loss ins. for Landlords - Posted by Miller28027

Posted by tyler on September 17, 2003 at 06:51:21:

I’ve heard that this is becoming more of an issue…I’m in Charlotte, NC…now i’m using Nationwide for a commercial business policy…email me if you want a ph# or name a few others in town.

Rental loss ins. for Landlords - Posted by Miller28027

Posted by Miller28027 on September 17, 2003 at 06:24:43:

I am getting financing through a company in Charlotte, NC and since I have 6 rental properties they want me to get this ins. (Rental income loss) I under stand that it will pay the mortgage on a property if it is vacant.

Question- Nobody has ever required this before. Why now. The loan I’m getting is a stated income (the person that is originating the loan said my debt to income ratio was to high. State that my income is higher…(Stated income…) Did they just waste my time or did she mess up the loan.

Question 2- Does any body know who sales this ins. I’ve called some companies in Concord, NC and they don’t know what I’m talking about.

Can the company just change the income and send it back to the underwriter and get it approved, (I’m thinking the under writer will still want this ins. as protection, now more than ever.)

What to do, What to do.

Any help, any one…


One more thing … - Posted by Frank Chin

Posted by Frank Chin on September 17, 2003 at 09:18:59:


I forgot to mention this coverage is part of the “Harazrd Insurance” I get. I tell the broker to include “Rent Interruption” insurance.

The way my policy is written, 10% of the physical damage amount is allocated for rent interruption. So if I insure the structure for 300K total, 30K would be allocated for rent interruption and 270K for fire damage.

Just to add, as far as insurance premiums go, the difference between 270K coverage and 300K coverage (not having rent interruption) is negligible. Ten percent more coverage does not translate into 10% higher premium.

Frank Chin

Re: Rental loss ins. for Landlords - Posted by Frank Chin

Posted by Frank Chin on September 17, 2003 at 08:59:35:


I’m in NYC, had rentals for 20 years, and its been a requirement here going back that long. I’m also told its a FANIE MAE requirement on NOO’s when I asked. I don’t recall it a requirement for OO’s, if that’s how the loans were obtained originally.

A landlord two doors down from one of my rentals had a fire, and the fire marshalls had him vacate the whole building, till it was repaired. The repairs took several months.

In the meantime, he had top of the line insurance where the tenants was put up in a furnished apartment, and he filed a claim for rental losses.

I also own a business where I have business interruption insurance. Same concept. I can pay my bills while the place is fixed, and I don’t have to file bankruptcy.

I understand some REI might have tons of money in reserve funds in the bank to weather such an emergency. But based I discussions I see on this board, I can see most here would fall behind if there’s no rent coming in for several months, and even file bankruptcy.

If I was a banker, I would require from a common sense standpoint. Every REI believes he or she can handle an emergency, till the time comes, and find out it costs more than one thinks.

Frank Chin