Insurance company and vacancy

[nepoez]

When I got my second rental insured, it was vacant and the insurance company asked me to let them know as soon as it`s rented.. however it is still not rented out even now. They called a couple weeks ago and asked about the situation and told me that I need to get it rented out as it is insured as vacant property now. They want me to call them back in 2 weeks.

I asked them what happens if I can`t get it rented out after 2 weeks, the lady said "I don`t know". She said that I will need to call back in 2 weeks and ask again and she`ll speak to the underwriter.

What do you guys think is happening? Am I screwed?

 

[GarthChapman]

You should be able to buy a Vacancy `permit` and will probably need to have someone checking on the property regularly, perhaps as often as daily. Do a deal with a neighbour; give them a key and have them go in on a schedule.

The best rates on Vacant property coverage we have found is with State Farm Insurance.

 

[HeatherBrandt]

I second Garth`s comments. State Farm has also suggested to me to create a simple form and have the neighbour initial when they check out the vacant property.

Heather

 

[Thomas Beyer]

QUOTE (nepoez @ Dec 28 2008, 02:18 PM) When I got my second rental insured, it was vacant and the insurance company asked me to let them know as soon as it`s rented.. however it is still not rented out even now. They called a couple weeks ago and asked about the situation and told me that I need to get it rented out as it is insured as vacant property now. They want me to call them back in 2 weeks.

I asked them what happens if I can`t get it rented out after 2 weeks, the lady said "I don`t know". She said that I will need to call back in 2 weeks and ask again and she`ll speak to the underwriter.

What do you guys think is happening? Am I screwed?
most insurance firms do not like vacant properties due to increased risk of flooding, theft, break-ins .. some will add an extra fee but some will not insure it anymore .. or worse: they take your money, but if it burns down they say "sorry .. it was vacant and as per paragraph x.y.z subsection a.b we will not pay your claim"

Find out details and consider a different insurance firm.

Also ask: why is it not rented ? December / January are the hardest months to rent .. but is the rent set low enough ? Rents now are somewhat lower than early 2008 due to poorer economy and more vacancies / higher supply from unsold condo inventory in most markets !! Are there incentives to move in ? Is it propery advertised ?

Who is managing it, anyway ?

 

[Sarnia]

All companies have the same basic coverage - your kidding yourself if you think one is significantly better than another - most of the policy wordings are standard. Anyways, the hoops you have to jump through to get there can vary - based on the knowledge of your broker - find someone who is experienced in this area. The reason the insurance companies follow-up is because they want to make sure you are taking care of the property ie shovelling snow - if you fail to take care of these things - they are on the hook for injuries that could be caused out of your negligence to ensure the safety of your proeprty. Also, they don`t want a proeprty sitting vacant - due to the increased risk of vandalism, theft, etc... the fact that your broker is not aware of what will happen in 2 weeks if it is not rented causes me to be concerned - these people earn a comission and should be able to advise you what the concern is - you need to have your brkr call the underwriter and confirm what will happen. Also most underwriters will consider some leeway if the case is presented properly - ie I took possession of the home dec 1/08, it is Christmas - add on Vacancy permit - I will get it rented - here is the info - I drive by - check on it every day - the water is turned off (nobody wants broker pipes bursting) - I have maintained my heating, my neighbor keeps an eye on the house - or I installed an alarm system..whatever you have done to ensure you are taking care of your investment puts the insurance companies at ease that you are taking care of your property, and doing everything to get it rented - above all - don`t ever lie - that is normally when you will have a claim - pay the extra $30/month for the vac permit and read your wordings so you know what you are not covered for.
Good Luck, and remember - If they insure your home and other business -- they will work with you to keep your business as well.

 

[nepoez]

Thanks for the detailed info. This property is also the last one they will cover for me. They said they will only cover max of 2, but they made the last one an exception due to the urgency at that time. I think I will need to find a broker for my next one. I also just purchased another property but it is with a partner so he will find an insurer for that one.

The good new for this episode is that the PM just confirmed that we now have a renter, signed lease, and received deposit.



QUOTE (Sarnia @ Dec 29 2008, 10:14 PM) All companies have the same basic coverage - your kidding yourself if you think one is significantly better than another - most of the policy wordings are standard. Anyways, the hoops you have to jump through to get there can vary - based on the knowledge of your broker - find someone who is experienced in this area. The reason the insurance companies follow-up is because they want to make sure you are taking care of the property ie shovelling snow - if you fail to take care of these things - they are on the hook for injuries that could be caused out of your negligence to ensure the safety of your proeprty. Also, they don`t want a proeprty sitting vacant - due to the increased risk of vandalism, theft, etc... the fact that your broker is not aware of what will happen in 2 weeks if it is not rented causes me to be concerned - these people earn a comission and should be able to advise you what the concern is - you need to have your brkr call the underwriter and confirm what will happen. Also most underwriters will consider some leeway if the case is presented properly - ie I took possession of the home dec 1/08, it is Christmas - add on Vacancy permit - I will get it rented - here is the info - I drive by - check on it every day - the water is turned off (nobody wants broker pipes bursting) - I have maintained my heating, my neighbor keeps an eye on the house - or I installed an alarm system..whatever you have done to ensure you are taking care of your investment puts the insurance companies at ease that you are taking care of your property, and doing everything to get it rented - above all - don`t ever lie - that is normally when you will have a claim - pay the extra $30/month for the vac permit and read your wordings so you know what you are not covered for.
Good Luck, and remember - If they insure your home and other business -- they will work with you to keep your business as well.