Fire/Building Replacement Insurance

[David George]

Is there a maximum # of single family rental properties that insurance companies allow before they require you to switch from personal (fire/building replacement) policies to a commercial policy?

The reason I am asking, is that I am in the process of closing on my 5th single family rental property and my insurance broker is telling me that my only option for (fire/rebuild) insurance is a commercial policy for this 5th rental and any more I purchase (which costs double what I am paying for my personal policies on my 4 other rentals).

My insurance Broker has checked with 3-4 insurance companies and they have all said they allow up to 4 rental properties on personal policies, 5 and up they require a commercial policy.

Thanks in advance for any advice.
Dave in Waterloo

 

[DonCampbell]

The insurance business has really tightened-up their rules on rental properties and the number they wish to have covered in their portfolio.

Right now Members are having a lot of luck with cooperators as well as the broker Park Insurance (in Burnaby BC choose your team not based on geography but on their talents).

I also recommend that you use the quick search function of this site to search Insurance to see some of the many otehr discussions on this important topic.

 

[Dabbler]

QUOTE (davigeor @ Sep 19 2008, 09:45 AM) Is there a maximum # of single family rental properties that insurance companies allow before they require you to switch from personal (fire/building replacement) policies to a commercial policy?

The reason I am asking, is that I am in the process of closing on my 5th single family rental property and my insurance broker is telling me that my only option for (fire/rebuild) insurance is a commercial policy for this 5th rental and any more I purchase (which costs double what I am paying for my personal policies on my 4 other rentals).

My insurance Broker has checked with 3-4 insurance companies and they have all said they allow up to 4 rental properties on personal policies, 5 and up they require a commercial policy.

Thanks in advance for any advice.
Dave in Waterloo
Dave,
I`m a former insurance broker of twenty years. I defected from the business to stay home with my two children. My experience when I handled home insurance was that the underwriting companies only had enough capacity under the "personal" insurance side of things to insure usually 3 to 4 rentals as they know people buy other properties for investment and its not necessarily a "business" they are running. However when they do see more rentals coming in the picture, they do consider it a business and because it really is isn`t it? You have created a business exposure and need to be insured appropriately and thus, there is the commercial type rates that apply to such business. Don is correct about Co-operators. I can vouche for that because that is one of the last places I did work and they have great products. They are flexible in their underwriting (they look carefully at each and every situation and sincerely try to accomodate) and not as stringent as some companies. Not only that, they`re premiums are very competitive. The really do "work" for people (very community oriented) and even moreso when there is a claim. Thats all I have to say!

 

[AsheGoodman]

QUOTE (Dabbler @ Sep 21 2008, 07:40 PM) Dave,
I`m a former insurance broker of twenty years. I defected from the business to stay home with my two children. My experience when I handled home insurance was that the underwriting companies only had enough capacity under the "personal" insurance side of things to insure usually 3 to 4 rentals as they know people buy other properties for investment and its not necessarily a "business" they are running. However when they do see more rentals coming in the picture, they do consider it a business and because it really is isn`t it? You have created a business exposure and need to be insured appropriately and thus, there is the commercial type rates that apply to such business. Don is correct about Co-operators. I can vouche for that because that is one of the last places I did work and they have great products. They are flexible in their underwriting (they look carefully at each and every situation and sincerely try to accomodate) and not as stringent as some companies. Not only that, they`re premiums are very competitive. The really do "work" for people (very community oriented) and even moreso when there is a claim. Thats all I have to say!

Hi Dabbler,

Just a quick follow up question to your comment. If I own a home (my primary residence), you`re saying I can keep properties under the "personal" umbrella for the first few. After this time when I get more exposure and am required to obtain commercial insurance, does that have to apply to those first few properties? Or, can I keep them under my "personal" umbrella?

The reason is that I have enough funds to do the first few deals but don`t anticipate getting back in to investing until late next year. So I was hoping to do this under my personal umbrella for now, and then as I get back in slowly again next year, I`d get commercial insurance then.

Your reply (and anyone else`s) is appreciated...as always!

Regards,

|Ashe|

 

[Dabbler]

QUOTE (AsheGoodman @ Sep 22 2008, 12:33 PM) Hi Dabbler,

Just a quick follow up question to your comment. If I own a home (my primary residence), you`re saying I can keep properties under the "personal" umbrella for the first few. After this time when I get more exposure and am required to obtain commercial insurance, does that have to apply to those first few properties? Or, can I keep them under my "personal" umbrella?

The reason is that I have enough funds to do the first few deals but don`t anticipate getting back in to investing until late next year. So I was hoping to do this under my personal umbrella for now, and then as I get back in slowly again next year, I`d get commercial insurance then.

Your reply (and anyone else`s) is appreciated...as always!

Regards,

|Ashe|

 

[rico67]

yes this true in regards to multi properties what I have

 

[rico67]

Hi Dave

 

[rico67]

Let me try this again , I am a current insurance broker for the last 17 years and I have set up all my properties on a master commercial policy the rate is alot cheaper as a I add locations , I also don`t recomend you add multi rental to your personal home owners due to the fact of any claims that may arise will effect your personal homeowners for years to come , unlike the commerial .

Regards
Riccardo