High insurance costs
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High insurance costs (by MJ [PA]) Oct 12, 2017 10:38 AM
       High insurance costs (by MJ [PA]) Oct 12, 2017 10:43 AM
       High insurance costs (by Barb [MO]) Oct 12, 2017 10:44 AM
       High insurance costs (by S i d [MO]) Oct 12, 2017 11:08 AM
       High insurance costs (by Jeffrey [VA]) Oct 12, 2017 11:33 AM
       High insurance costs (by Brian [NY]) Oct 12, 2017 12:01 PM
       High insurance costs (by LindaJ [NY]) Oct 12, 2017 1:53 PM
       High insurance costs (by AllyM [NJ]) Oct 12, 2017 8:03 PM
       High insurance costs (by Ed [PA]) Oct 12, 2017 10:18 PM
       High insurance costs (by Robert J [CA]) Oct 12, 2017 10:48 PM
       High insurance costs (by NC INVESTOR [NC]) Oct 13, 2017 7:23 PM

High insurance costs (by MJ [PA]) Posted on: Oct 12, 2017 10:38 AM

I am considering dropping all insurance myself. Spoke to my State Farm agent this morning and they are willing to sell me just the liability policy for $500K per unit at $54 a month/unit. I have the highest deductible possible still the annual costs keep going up and up. I do not make small claims and have had insurance only for a catastrophic loss but still keep creeping up. I have to keep insurance on the financed buildings due to bank regulations. Going self-insured is also a plan. Big companies like U-haul are self insured. If you have been doing this business for as long and I have (20 years plus). You know how much you have paid in premiums and what losses you have had.

I'd like to know how many of you are self-insured and what do you think about.


High insurance costs (by MJ [PA]) Posted on: Oct 12, 2017 10:43 AM

The other side of my decision is lack of faith in the insurance system. What happens in the claim and damage situation is first the company will try their best to find you at fault and not pay the claim. Then they will pay a lot less than your actual loss. Have you has a big loss and how was that handled. --67.163.xxx.xx

High insurance costs (by Barb [MO]) Posted on: Oct 12, 2017 10:44 AM

I've done liability only on a couple of places. Usually, they were older and low value. One I dropped insurance with the bank's OK once the loan was down to the value of the lot without a structure. We did that for a couple of years before tearing it down.

For me, it depends on what it costs to insure compared to how much I would be out. If I own it free and clear and it is older, I'll self insure since I would have no problem borrowing to rebuild after a fire.

Keep in mind, you will need to have a nice cushion in the bank in case of hail or fire. --67.43.xxx.xxx

High insurance costs (by S i d [MO]) Posted on: Oct 12, 2017 11:08 AM

The problem you face is the risk of a catastrophic loss. My combined premiums on all units is less than the value of 1 house... so basically I'd have to go over 20 years without a claim to "break even" on the additional risk I was assuming.

I'm in year 12 now, and I've already had one loss due to fire. The proceeds I received paid back my insurance premiums for the first 5-6 years.

How spread out are your units? I live in the Mid-West and we get tornadoes. One EF-5 could take out everything I own in a single swoop. I can't afford to "go naked."

If all your units are in one apartment complex, a fire could wipe you everything.

Regarding insurance company payout risk...good companies will pay out. States control what is legit and what isn't. My company paid for the fire we had without question. I use Shelter Insurance and Foremost. The claim was with Foremost. I had a check in hand for full ACV (maxed out our policy) within 3 weeks. --173.19.xx.xxx

High insurance costs (by Jeffrey [VA]) Posted on: Oct 12, 2017 11:33 AM

MJ, check out MrLandlordInsurance.com. You are just the kind of customer who should come out ahead using their service. They can offer you a free quote on your collection of properties and compare their rates to what you have been quoted. --72.214.xx.x

High insurance costs (by Brian [NY]) Posted on: Oct 12, 2017 12:01 PM

I have several policies with State Farm. When I purchased a small 6 unit apartment building 3 years ago, without giving it a second thought, I assumed that I would insure it with State Farm. I got a quote of $3,600/year!! I asked my agent why it was so high. He told me that State farm doesn't like to insure apartment buildings and that I should get additional quotes. I called 4 other companies and got quotes from $980 - $1,700 with a 5k deductible. --67.248.xxx.xxx

High insurance costs (by LindaJ [NY]) Posted on: Oct 12, 2017 1:53 PM

I keep my deductibles high, because I am really only looking for coverage for catastrophic loss. But I still have insurance on my buildings. Had a medical claim a few years ago because someone fell on a step. He got $75,000. Not a lot but enough it made it worth paying my premiums. --96.236.xx.xx

High insurance costs (by AllyM [NJ]) Posted on: Oct 12, 2017 8:03 PM

I pay about a thou per year per building. AXIS is the name of the company. But my buildings are higher end duplexes. --73.33.xxx.xxx

High insurance costs (by Ed [PA]) Posted on: Oct 12, 2017 10:18 PM

My experience with State Farm is also high premiums as they don't like rentals. Try Farmers or Hannahstown Mutual Insurance. If you have any mortgages you cannot go uninsured. I insure market value rather than replacement value, much cheaper. --24.154.xxx.xx

High insurance costs (by Robert J [CA]) Posted on: Oct 12, 2017 10:48 PM

Self-Insurance Story! Please read.

1) A bank foreclosed on a multifamily apartment building and no one wanted to bid at the foreclosure auction. So the property was then owned by the bank/mortgage holder.

2) For the next two years the bank was not liable to manage the property or keep it up to code. Things went unfixed. Tenants moved out and gangs moved in. No one cared!

3) As a landlord/contractor, the Bank/Owner and the City Housing Department wanted to get "someone" to turn the property around.

4) I was offered the property for a "cheep cash price" and was promised I had 4 to 6 months to turn things around.

5) I purchased the property with a 50% down payment and securing a basic "Fire/Liability" policy.

6) The day after my purchased I was delivered by hand at the property two years worth of "Violations" by the various City Departments.

A) My mortgage was called in

B) My insurance was cancelled

C) The property was "Red Tagged" and the remaining tenants had to move out.

The City wanted me to pay all units around $,5000 in relocation costs.

At this point my LIABILITY was huge. Because I had no insurance and the load was with a Federally Insured Bank, I was looking at many "Takers" that wanted my property.

BUT since I was a contractor that "had many other types of Insurance" AND "I WAS ALSO SELF INSURED WITH THE STATE" (Having 1/4 million dollars in a trust account naming the State as beneficiary in case of specific judgments. With out the City, State, Bank and others securing a Judgement in Court, after a trial, I was shielded from further punitive actions by "government".

Within weeks the State then changed it policy about Self Insurance. Now I could no longer just set up a special trust account, I had to give the money ($250,000) to the state to be self insured.

I then got caught a few months later operation under self insurance again. They wanted to throw the book at me. But now I put the $250,000 in State Bonds and had my broker set it up naming the State in trust. Again the State Insurance People then had to rule against me again....

So during this came of cat and mouse I was able to fix up my property and get it insured, meeting all codes and rules, laws and "made up stuff" that came my way.

It is not that easy to be self insured when you:

Have tenants that are "People". Have a Loan. Have a property under the radar of Various Housing Departments... --47.156.xx.xx

High insurance costs (by NC INVESTOR [NC]) Posted on: Oct 13, 2017 7:23 PM

I originally has commercial company out of GA but switched to State Farm due to the outrageous rates.

I really like SF. Their rates are very reasonable but then rates are regional so your area might well be higher. i know when we moved here from Philly we thought the insurance quotes were quarterly rates.

I have had two major claims with SF both due to water damage. It seems builders here think that overflow pans and hot water heaters belong in the attic.

SF handled it quickly with no disputes Full replacement cost and lost rent. The only insurance I like better is USAA but they outsource investment properties to a company that won't handle more than 10 and are much more expensive than SF.


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