Author Topic: Insurance for a Non owner occupied house  (Read 6267 times)

geekette

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Insurance for a Non owner occupied house
« on: March 20, 2015, 03:57:54 PM »
My husband and his sister inherited their father's house last spring.  It has been mostly vacant since (estate auction, rehab) and now their cousin is moving in, preparing to sell her house and buy this one.  We're not charging her rent, but she's paying utilities.

Until recently, the old insurance policy through Nationwide was still in effect, since it had been renewed shortly before their dad died.  Now we're trying to find a policy that will just cover the house - a landlord policy, I suppose.  There are no liens on the property, so no actual obligation, but in case of fire, tornado, whatever, we'd like it to be insured.

The house is 1600 sqft 3/2 ranch built in the late 50's, in a small town in the middle of the state.  Tax value is $110k, and Nationwide had the replacement cost as $110k.  We got a quote via the Nationwide for a policy with American Modern (a company I've never heard of).  First they quoted $400 for the year, then when we said yes, they decided the replacement cost of the house must be set no lower than $160k, and bumped the rate up to $540 (with a $2500 deductible).

Because I'm cheap, I asked if there was any way to get it lower.  If we go with "Actual Cash Value" instead of replacement cost, the rate drops to about $350.  The agent doesn't know how they compute the actual cash value of a 50+ year old house. 

Should we just pay the extra for replacement cost for the (hopefully only a) few months until the ownership transfers? 


waltworks

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Re: Insurance for a Non owner occupied house
« Reply #1 on: March 20, 2015, 04:30:45 PM »
Assuming it is prorated and you'll get most of the premium back when someone else takes over the policy/buys the house, I would just suck it up and pay the few extra bucks rather than spend a bunch of time trying to find a cheaper option.

-W

SaintM

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Re: Insurance for a Non owner occupied house
« Reply #2 on: March 20, 2015, 04:45:30 PM »
You need a fire policy.  The quote you received seems high for the replacement cost and the deductible.  Then again, all things with real estate are local.

MikeBear

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Re: Insurance for a Non owner occupied house
« Reply #3 on: March 20, 2015, 04:49:45 PM »
YES! absolutely pay "replacement cost" for home insurance, even for a few months. You can't afford not to do so!

A tax value on a house, does not mean that's what it's worth, or how much it would cost to replace. In Michigan for instance, tax value is conservatively set at 50 percent of "worth", or assessed value. In reality, there's actual "value" multipliers based on where the house is located. For instance, 2.5 times assessed value is very common.

p.s. American Modern typically insures manufactured houses, so their policies cost more, as those types of houses tend to burn very quickly to the ground, with nothing salvageable. If this house isn't a manufactured house, don't insure with them.
« Last Edit: March 20, 2015, 04:53:02 PM by MikeBear »

geekette

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Re: Insurance for a Non owner occupied house
« Reply #4 on: March 20, 2015, 04:57:33 PM »
Any companies I should call?  Nationwide and our own insurance company (Amica) won't touch it.

It's still titled in FIL's name, which may be part of the problem.  I just wish the cousin would HURRY THE HELL UP! 

MikeBear

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Re: Insurance for a Non owner occupied house
« Reply #5 on: March 20, 2015, 05:03:42 PM »
Have you tried checking with a local insurance broker?

If you end up not finding anybody else to insure it, American Home is ok to use for the time you'll need a policy.

I think they're even one of the few insurance companies that'll let you pay monthly, instead of a whole year up front.

Another Reader

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Re: Insurance for a Non owner occupied house
« Reply #6 on: March 20, 2015, 05:23:52 PM »
You need an all risk policy that covers liability as well as property damage.  That's a landlord policy, because it's non-owner occupied.  Actual cash value is NOT assessed value.  It's the depreciated cost of the structure.  You do not want an actual cash value policy, as that will only pay the depreciated cost, not what it would cost to replace the house if it were destroyed.

The estate should insure the property until title passes to the heirs.  That will be difficult as long as the property is vacant.  If this company understands the situation fully and is willing to insure, you might be better off accepting the terms.  Otherwise, the executor has a responsibility to get the property insured immediately.

math-ya

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Re: Insurance for a Non owner occupied house
« Reply #7 on: March 22, 2015, 06:47:58 AM »
Safeco gives the best landlord rates in my area. Your quote seems high. I pay around 630/ year per house with full protection and 330k replacement value, 1000 deductible

clarkfan1979

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Re: Insurance for a Non owner occupied house
« Reply #8 on: March 22, 2015, 07:38:44 AM »
Safeco gives the best landlord rates in my area. Your quote seems high. I pay around 630/ year per house with full protection and 330k replacement value, 1000 deductible

So you are paying 1890/year for a replacement value of 330K total, not 330K per house, right?


I have a Safeco policy as well as non-owner occupied. I pay $675/year with a 5,000 deductible. A 1,000 deductible is around 1,100/year. The replacement value is 230K.

math-ya

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Re: Insurance for a Non owner occupied house
« Reply #9 on: March 22, 2015, 10:27:03 AM »
So you are paying 1890/year for a replacement value of 330K total, not 330K per house, right?

No, 330k per house. 300k/ house liability as well

BlueHouse

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Re: Insurance for a Non owner occupied house
« Reply #10 on: March 22, 2015, 10:32:21 AM »
Ii did mine through travelers. I think they are related to geico.

GuitarBrian

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Re: Insurance for a Non owner occupied house
« Reply #11 on: March 23, 2015, 11:51:25 AM »
I would recommend State Farm. They have a rental dwelling policy (covers the house, and minimal contents) They insured my 1953 house. $350 a year for 75k converge 300k liability.

I have had 2 claims, both were handled promptly and I am happy with the results.