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Property Insurance

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OlegP

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I am working on purchasing my next property now. The insurance agent I have been using advised me that I would be moved to a commercial policy, which can be considerably more expensive.

Can anyone recommend a cost-reduction appoach? Is commercial rate much higher? Should I contact a different insurer for my next property instead of accepting commercial policy from this one?

Thanks.
Oleg
 
Is the property a multi-family with more than 7 units? Or commercial property like a store?
if not change the agent.

T.
 
Oleg, have you tried TD Insurance. they are pretty competitive.

Neil
 
QUOTE (investmart @ May 19 2009, 09:35 PM) Oleg, have you tried TD Insurance. they are pretty competitive.

Neil

Thanks guys.

At the moment I have a fourplex and a single family rental. With the property I am trying to buy (a triplex) I would be up to 8 doors. What is the usual number for commercial policy?

If I try to use TD, can I go with another number of doors, and then possibly find yet another insurer, or will they want to know the total number of properties I own to date?
 
Are you sure it is more expensive? We noticed a small increase but not a huge one. Still run between 600-700/yr on a regular old suited house in Calgary. Gets cheaper the more properties you add too.

We ran into the same issue you are now facing when we got past seven doors a couple years ago. Really not much you can do about it as that is the policy with most insurers.

Rental property insurance is definitely more expensive than owner-occupied insurance so you can`t really compare the two.

TD Melloche Monnex does NOT do rental properties. They called me for a renewal on my old owner-occupied and when I told them it was now a rental property they told me they do not do rentals.

QUOTE (OlegP @ May 20 2009, 08:46 AM) Thanks guys.

At the moment I have a fourplex and a single family rental. With the property I am trying to buy (a triplex) I would be up to 8 doors. What is the usual number for commercial policy?

If I try to use TD, can I go with another number of doors, and then possibly find yet another insurer, or will they want to know the total number of properties I own to date?
 
Brett is right. Most insurance companies will opt to change your policy from personal to a commercial policy once you have 4 or more properties. This is not a big deal, you may see a small increase but nothing to worry about.

You may ask to increase your deductible to $1,000 as this will generally save you 15%. You will also want to ask your agent if the company that they are putting your insurance thru offers you one deductible per occurrence. This is very helpful in cases like a hail storm. We are insured thru Wawanesa and we had 3 roofs replaced and one basement redone from water back up and we only paid 1 deductible, as they all happened during the same storm. What a Great savings.


You will also want to ask for Tenant Vandalism (free), Water Sewer Escape (between $25-$50 per property or in some cases free) and 2 Million liability(between $10-$20 per property).

As REIN teaches and I agree, you should be sure that your insurance agent has experience with real estate investors and he can answer your questions.

Good Luck,

Dan
 
QUOTE (OlegP @ May 19 2009, 05:41 PM) I am working on purchasing my next property now. The insurance agent I have been using advised me that I would be moved to a commercial policy, which can be considerably more expensive.

Can anyone recommend a cost-reduction appoach? Is commercial rate much higher? Should I contact a different insurer for my next property instead of accepting commercial policy from this one?

Thanks.
Oleg


On our fifth property AMA wanted to switch us to a commercial policy. It was going to be significantly more. We discovered State Farm and built a good relationship with the agent and saved. We kept our home policy with AMA.
 
QUOTE (dannielsen @ May 21 2009, 12:32 PM) This is very helpful in cases like a hail storm. We are insured thru Wawanesa and we had 3 roofs replaced and one basement redone from water back up and we only paid 1 deductible, as they all happened during the same storm. What a Great savings.

You will also want to ask for Tenant Vandalism (free), Water Sewer Escape (between $25-$50 per property or in some cases free) and 2 Million liability(between $10-$20 per property).

Wow nice work by your insurer! And great insight to which options to push for when setting up a policy.

I would also add that your insurance agent should give you the absolute top tier policy for your own home when you are insuring multiple places with them. You might not get it for your first couple but if they ask you about a commercial policy that is the time to push for some `extras` on your personal account!

I pay next to nothing and have things like a 2500/mo accommodation allowance while my home is torn down and rebuilt in the event of a total loss. Also great insurance on our vehicles and any other things (wife`s ring, personal possessions etc)
 
QUOTE (RedlineBrett @ May 22 2009, 08:23 AM) Wow nice work by your insurer! And great insight to which options to push for when setting up a policy.

I would also add that your insurance agent should give you the absolute top tier policy for your own home when you are insuring multiple places with them. You might not get it for your first couple but if they ask you about a commercial policy that is the time to push for some `extras` on your personal account!

I pay next to nothing and have things like a 2500/mo accommodation allowance while my home is torn down and rebuilt in the event of a total loss. Also great insurance on our vehicles and any other things (wife`s ring, personal possessions etc)

Thank you all for great suggestions!
 
QUOTE (dannielsen @ May 21 2009, 12:32 PM) Brett is right. Most insurance companies will opt to change your policy from personal to a commercial policy once you have 4 or more properties. This is not a big deal, you may see a small increase but nothing to worry about.

You may ask to increase your deductible to $1,000 as this will generally save you 15%. You will also want to ask your agent if the company that they are putting your insurance thru offers you one deductible per occurrence. This is very helpful in cases like a hail storm. We are insured thru Wawanesa and we had 3 roofs replaced and one basement redone from water back up and we only paid 1 deductible, as they all happened during the same storm. What a Great savings.


You will also want to ask for Tenant Vandalism (free), Water Sewer Escape (between $25-$50 per property or in some cases free) and 2 Million liability(between $10-$20 per property).

As REIN teaches and I agree, you should be sure that your insurance agent has experience with real estate investors and he can answer your questions.

Good Luck,

Dan

Thank You Dan, Great input!!!

To be honest I also did not know you can insure against tenant vandalism that easily. also, nice job replacing stuff for free!


Oleg,

I believe TD will have no issue insuring up to 8 doors as residential. however, not sure if it`s the number of properties or doors they count to decide when to say no or change your insurance status. anyway worth trying but again to be honest Dan`s company is either SUPERB or I just do not have the best insurance available out there. I got a very good quote though, less than $20 a door a month!



Regards,
Neil
 
For those REIN™ Members following this post, you know many of these concerns have been addressed by the exclusive REIN™ member insurance program...Eastern Canada REIN™ members, you have heard about the exclusive REIN™ member insurance program in Western Canada, and you have asked when the your program would be available. We are proud to announce the OFFICIAL launch of the new REIN™ Member Property Insurance Program for Eastern Canada this month (June 2009). That`s right; the coverage you asked for is finally ready in one simple package. Single Family, Multi-Family or condos and a special package available for student housing. Be prepared to have your expectations surpassed!

************************************

For a little success story from some members using this program read the following story below from Don Buchanan, Len Fullen, Denzal Lobo, Bob Buchanan (Properties of Distinction Co.)... below is an email note we received recently

REIN™ Insurance Program saves Properties of Distinction Big Bucks!!

Thanks Russell, Don all the REIN™ staff and members and Brian Fitzpatrick from Park Insurance, who were involved developing this great insurance program.

Over the past few years its been an exciting ride to see our apartment property values increase dramatically. To keep pace we have been steadily increasing our replacement costs of insurance on our apartment buildings. The result has been a doubling of our insurance costs in the past 3 years to an average of $400 per apartment unit per year in 2008.

Under the new REIN™ Insurance Program with Park Insurance; PODCO has been able to reduce our insurance costs on 135 of its apartment units by an average of 34% or $135 per door per year. This is a combined savings of $18,225, which coming from a Scottish background is a great cause for this "laddie" to celebrate. We have realized these savings in 2 ways. An 18% saving was achieved by increasing our apartment insurance deductibles from $1000 to $10,000. The reason was that it made no sense for us to continue to have a lower $1000 deductible for an apartment building when we had no intention of making small claims of $10,000 or less.

Another great feature is the dispersing deductible at claims of $10,000 or more - so you pay no deductible. Another 14% saving was realized by the lower premiums of the REIN™ Insurance Program. The REIN™ Insurance Program also has many other superior benefits to other insurance programs that Brian Fitzpatrick explained at our January workshop in Edmonton. We plan to convert all our apartment buildings over to the REIN™ insurance program; because it offers much better insurance at much lower costs. This is a WIN WIN for PODCO and our investors.

I encourage other REIN™ members to check into this insurance program and also to carefully consider what is a realistic amount for their insurance deductibles. If they do not plan to make small insurance claims and have their insurance costs increase as a result of these small claims - then why pay for the lower deductible.

For baseball lovers like myself the REIN™ Insurance Program is another home run hit on behalf of REIN members - thanks for keeping on slugging for us !!!

Thanks "Laddies and Lassies" and everyone who helped develop this great insurance program.

Best Regards and God Bless,

Bob Buchanan
for Denzal, Len and Don
Properties of Distinction Corp
Edmonton
 
I`ve read some discussions on this and other boards about the idea of renting your principal residence and owning investment properties. This idea appeals to me, as I currently rent in a major urban city, which is expensive and not very landlord friendly. I have a significant amount of cash saved and am interested in buying investment properties on the outskirts of this city, where many of the REIN top ten towns are situated.

However, after making several inquiries I have found that one of the major problems with this idea, is that unless you already own a principal residence, most insurance companies won`t insure investment properties on their own. You usually have to go through an insurance broker who finds you a specialty insurance package. For a two storey duplex house that I was interested in, insurance was going to run me somewhere in the range of $1700.00 - 2000.00.

Anyone care to weigh in on this situation or knows of an inurance company that might offer more reasonable rates?

Thank you.
 
Windsor - Give Van Allen Insurance in Elmira a shout - Email me if numbers are needed - they`re very investor friendly
 
QUOTE (housingrental @ May 28 2009, 03:51 PM) Windsor - Give Van Allen Insurance in Elmira a shout - Email me if numbers are needed - they`re very investor friendly


Actually the name is kind of misleading. I live in Toronto, but want to invest in Barrie.

Thanks though.
 
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