Posted by Marc NJ on January 08, 2003 at 20:00:21:
the area that the property is in. If the area is an upper middle class , where you know the chance on vandilism is low, I wouldn’t worry about it, much. If the property is in a lower class area I would pay the extra for the insurance.It depends on your instincts and how much your willing to pay for coverage. I had a property inthe 250k range area and dropped the vandalism coverage, it was vacant for 6 monthgs without any problems, also I had th3e neighbors looking out for the property, they had my number and the only thing that happened was a tree fell during a storm, they called right away, it did no damage, but you never know whats in store for you on any deal.
This is just my 2 cents, good luck.
Marc F.
Rehabber needs leads for good insurance carrier - Posted by Tim Sidders
Posted by Tim Sidders on January 07, 2003 at 20:05:47:
Greetings
My partner and I started a RealEstate Investment Co. last spring and are well on our way, we are currently having a hard time finding reasonable insurance however, We are mostly investing in SF homes and they are of course vacant. We hold the properties from anywhere from 3-12 months while being renovated and our insurance rates are anywhere from $300-$400 quarterly! My agent was trying to put together a contractors package for us but that too was almost $3000 per year as a $1m umbrella. I would like some feedback if any of you have had any luck with a company that would be more reasonable to the pocketbook.
I’ve had similiar experience as Nate, vacancy insurance on our last rehab was 398 per quarter we insured it for our purchase price of $72.9. I tried to get builder’s risk through Zurich but was told they wouldn’t touch me as an individual investor. I’ll try Tapco that Nate mentioned and see if I have any luck. If you search the archives there’s a tone of info on insurance, use the key words “bulders risk”, “vacancy ins”, etc.
Posted by Marc NJ on January 07, 2003 at 22:12:40:
I use a broker in NJ that vacant property insurance is not at all expensive, B/C my company drops the vandalism protection off the policy.Then the rates are in the 400-500 dollar range per yr, assuming the value is approx. 100k.
I would call around and find acompany that will let you drop the vandalism rider on the policy.
It has worked for me in the state of NJ. Give it a shot, Good luck,
Marc NJ
Posted by Nate(DC) on January 07, 2003 at 20:42:30:
I don’t think those quotes are out of line with what I get.
For vacant property insurance we’re seeing about 0.1% of the insured value, per MONTH, as a premium. So on a $200,000 house you would be paying around $200/mo. That’s just for vacant insurance w/o builders risk.
Builders risk I have gotten from two different sources. From Zurich it’s about 0.5% of the COMPLETED value of the property, for a one year policy. (I.e. property worth $200,000 after repair, would cost $1,000 per year to insure on builder’s risk). The problem is Zurich has become much more conservative in their underwriting recently and is placing more restrictive limits on the age of the property as well as who can do the work. The last builders risk policy I tried to obtain with Zurich required a licensed general contractor, which I do not use. So I went with option B - Tapco, which sells for Lloyd’s of London. The cost is about 0.5% of the insured value, but that’s for only a six month policy. And it’s only insured for your cost into it - not profit. So it’s clearly an inferior policy. But then again, no questions were asked.
I don’t know what price range your properties are in but if they are in the $100,000 - ish range, your quotes sound about right to me. Vacant property insurance is expensive. And with good reason too, from an insurance company’s perspective!
Posted by Nate(DC) on January 08, 2003 at 15:36:40:
Tapco is at www.tapcounderwriters.com - they sell mainly through independent agents. One thing, they seem to indicate that they sell in the Southeast - I don’t know if Ohio is in their territory or not.
If not, they might be able to point you to someone who would write in Ohio.