Insurance trouble, I dont get it??

[Trainwrek]

Hi all. I live on a small farm in a 500 sq ft cabin. I never got insurance on the place because it's just too expensive and there's nothing really worth insuring. I can pretty much afford to fix anything that might break. So now I bought a second home nearby for some supplemental rent income. I'd like that house to be insured. I'm really having a hard time getting insurance for that house. So far the first place I called flat out never got back to me. The second place now tells me that because I dont have insurance on my cabin, they won't insure the house.

I still don't understand this and it seems like a scam to force me to insure everything I own or get no insurance at all. I don't want insurance on the cabin, its not worth it to me. Any one know about this stuff? Is there a way for me to insure the rental house without involving the home cabin? The cost is just too much and it pretty much kills any gain from renting the house!

[crazyfarm]

You can afford to rebuild the cabin and everything you own in case of a fire or something like that? If you can then I doubt insurance is cost inhibitive to you. That's neither here nor there though. I'm not sure about rental insurance but I think you should try Zander.com to get a quote.

[Micheal]

What type of insurance are you looking for?
I have a "home owners" policy on my residence but a "landlords" policy on the house I rent out. Neither are tied to the other.

[DAVID In Wisconsin]

It will be very difficult to get rentals insured without having your primary home insured. I have never found a company who do one without the other. But you might be able to get a renters policy on your cabin to cover just the contents and then be able to get a policy for the rental. Good luck!

[Alice In TX/MO]

Call American Century. They insure my rental properties without having the coverage on my primary dwelling.

[MO_cows]

You should go to an independent agent and have them shop multiple companies for you.

If you don't want to cover your home with insurance, you still might want to consider a liability policy. Even though you think you can replace everything out of pocket if you have a fire or whatever, what about the trespasser who gets hurt on your property and then sues you?

But irregardless, you should be able to get a policy on the rental dwelling. We have two properties that are classified as rentals, even though it's a family financing deal, and one of them has an independent policy. We have no other policies with that agent or that company, so unless they have access to some database showing our other insurance policies, they wrote a standalone rental policy, period, no questions asked except about the property to be insured.

[Harry Chickpea]

Try to find an independent insurance agent and let that person do the work for you. That said, it is much harder to insure rental property than it was twenty years ago. What you CAN do is write any rental agreement forcing the tenant to buy renter's insurance (including a set amount for liability) and maintain the property to the standards it was when first rented (photos and videos please) - including any exceptional and unusual wear on appliances.

That primarily leaves you with fire and some liability. If your assets are in protected investments like IRAs and you only live in a 500sf cabin you are essentially suit-proof other than the rental property itself. The cost of trying to squeeze you for money would over-ride any possible settlement.

[Trainwrek]

Originally Posted by Micheal

What type of insurance are you looking for?
I have a "home owners" policy on my residence but a "landlords" policy on the house I rent out. Neither are tied to the other.

I would like the policy to have nothing to do with my cabin but the ask me if I am residing in the house. I said no I'm renting it. They ask me where I live do I own it or rent it, and do I have insurance. When I say I have no insurance on the cabin I get a pause and like "hmm, so you are uninsured".

I asked what my home has to do with insuring the other home, he said something about the policy insuring ME wherever I am and not the dwelling. Makes no sense to me. So just insure the house, I said!

After maintenance and taxes I'm not making much more than a few grand on the place. Now if I have to insure two houses I'm lucky to break even.

[Trainwrek]

Originally Posted by crazyfarm

I'm not sure about rental insurance but I think you should try Zander.com to get a quote.

Tried Zander, they wont insure the house because it has over 5 acres of land.

[rambler]

Insurance companies are really only a few giants out there.

Your agent near you is just an office person, try to get you signed up and get your money.

The giants have pools of insurance types - everything in that pool is all exactly alike, and then their computer models can see if they have 300,000 policies just exactly like that, what the odds are of paying out on how many of them. Then they can figure out how much to charge each of those 300,000 folk.

So, you are not fitting into the common slots.

A farm is different than a house, so you miss the biggest pool. You have some acreage with it.

A rental is different, so that means a different pool.

A fair number of people have a house they live in plus one other house they rent out, so there is a pool for that - but you don't want that, you only want the rental insured, so you don't fit that pool.

So I think you have 2 houses, with acreage each, one is yours, other is rental. You just want to insure the rental that is on some property, nothing else.

You need to find a pool with some giant insurance co that offers that special coverage. A pool of farm acreage and house, rental.

The local people you have talked to do not have access, or isn't worth their time, to find such a pool. It is easier for them to find a pool of 'owners house plus a farm acreage rental house' so that is what they are forced to try to sell you. Your requirements are not 'normal' or common for your area, not worth finding a special pool of similar policies.

Around here when you have anything beyond a typical household, its often good to go to a mutual insurance agent. They are not affiliated with one of the giant insurance companies, but rather can find different pools from most of the big giants. Often instead of pushing whatever the one big company has, they can customize from different pools to fit your situation.

This likely will cost more than a common pool of insurance, because its a little different than the common.

Insurance companies, like banks with loans, don't like the odd situations. They are set up for cookie cutter, everything the same sort of deals. They have a 'safety in numbers' sort of business, the more policies that are all exactly alike covering exactly the same thing, the easier they can do the coverage and make a common policy.

You need to look for an agency that deals a little off the common, beaten path.

Paul

[Darren]

Have you tried Farm Family? Insure the rental as a business.

http://www.farmfamilyvt.com/

[crazyfarm]

Originally Posted by Trainwrek

Tried Zander, they wont insure the house because it has over 5 acres of land.

Sorry!!!

[OH Boy]

I suspect that what they are concerned about is a General Liability claim (against you personally) that may occur due to something at your cabin location, but made as a claim against the rental location policy, since you do not have coverage from a homeowner's policy on your primary residence (the cabin). Their rates are likely based on the rental liability coverage being 'excess' (over and above) the coverage on the homeowners policy. Just my suspicion. You could ask if there is a way to cover the structure only. Although I would not personally recommend going without liability coverage. How much $ are we talking about to insure the cabin? At 500 square feet it probably is not a huge amount.

[AmericanStand]

Sounds like you are self insured. In that case Id put that money in a separate account and if asked say yes its insured.

[unregistered353870]

Transfer the rental into an LLC. Then get insurance on behalf of the LLC. Your personal living situation shouldn't be an issue in that case.

[Jlynnp]

Sorry but not having homeowners ins is a lawsuit waiting to happen. Sure you may well be able to afford to repair/replace things but in this day and age not having liability insurance is not a wise move. One person falling and getting injured on your property rather they have permission to be there or not can quickly turn into a financial nightmare. I have seen simple falls result in a lawsuit that while you may win it in court you can still be out thousands and thousands of dollars in attorney fees. As a former claims adjuster I have seen and paid those claims. The worst one I remember my insured won the lawsuit at the cost of $500,000 in legal fees.

[MSCantrell]

What you're after is called a "rental dwelling" policy. Sometimes you'll hear it called a "landlord" policy, but that's informal. A rental dwelling policy is like a homeowners policy- coverage for the property and for liability- except it has nothing for personal property. That's what you're after.

I'll second the suggestion to talk to an independent agent. They can sell you a policy from any of many companies. Most agents are able to sell policies from AT LEAST a dozen companies (some more, some fewer).

Also, be ready to call lots of agents. One rental dwelling policy is a pretty small transaction, so lots of agents won't give you the time of day for the $200 commission that you're going to generate for them. So keep calling. You'll find someone eventually who will take care of you.

(Source: I'm a property claims adjuster.)