Builders risk insurance for Real Estate Investors

When real estate investors buy distressed properties or homes that are in need of a renovation a standard landlord dwelling policy will not cover any claims on a vacant home under renovations

When a property is vacant you need to buy a renovation buildersrisk policy or a vacant home insurance policy

Our new Renovation insurance property insurance program will provide the coverage Real Estate investors need for

  • Vacant properties up for sale
  • Short term renovation fix and flip properties
  • Buy and hold properties in need of a few months of renovations before the tenant moves in

 

VACANT PROPERTIES UP FOR SALE

When a property is vacant and unoccupied on a regular insurance policy future claims could be denied

Water damage from busted pipes is common claim denial when a property is vacant

Theft or vandalism would be excluded as well

Make sure you purchase a Vacant policy to get coverage and you can buy our policy on a month to month billing so you only buy the coverage 30 days at a time

 

SHORT TERM RENOVATION FIX AND FLIP

If you are buying a property to renovate and put it back up on the market you need to purchase a renovation policy that also covers the property when the project is complete and up for sale

 

BUY AND HOLD TENANT OCCUPIED PROPERTIES

Our program will allow you to endorse or change the policy from vacant to renovation to occupied on one insurance policy so you don’t have to purchase a few policies during a renovation project

 

OUR NEW RENTAL ADVANTAGE PROGRAM INCLUDES

Homes that may not be accepted into a standard insurance program such as

  • Flat Roof
  • Aluminum wiring pigtailed
  • Fuses
  • Vacant
  • Window units
  • Bars on windows
  • Asbestos siding
  • No prior insurance

One policy for all types of properties for Real Estate investors

 

Baton Rouge new homebuyers: Coverage you need when buying a home

When buying a new home in Baton Rouge your number one goal is to make sure claims within the first year will be covered

  • Busted water pipes
  • Theft or vandalism
  • Under slab sewer line collapse
  • A/C unit shutdown
  • Roof replacement
  • Payment to replace personal property

A Baton Rouge homeowners insurance policy is not a home warranty policy so you don’t want to make any maintenance damage claims after you buy the house

You want to use your home insurance policy for financially devastating events that you can’t recover from or have the money in your bank to pay

You want to choose an insurance deductible that reflects the amount of money you have access to in your savings account to pay for damage

If you buy a house and only have $500 in your savings account a $2500 plumbing repair is going to hurt you financially but if you have access to $10,000 you don’t want to select a $500 homeowners insurance deductible

When you transfer more of the risk to you instead of all of the risk to the insurance company you pay less for Baton Rouge homeowners insurance

Here are coverage options you need when buying a home in Baton Rouge

  • Roof replacement coverage
  • Personal property replacement cost
  • Sewer backup
  • Service line replacement
  • Personal injury (Libel or Slander)
  • Equipment breakdown (A/C unit mechanical breakdown)
  • Extended Replacement Cost when cost of building materials increase

Not all home insurance policies are the same because an average home insurance policy needs 2 to 5 additional coverage options to make sure future claims are covered

Without an endorsed homeowners insurance policy you may be buying a weak insurance policy that will leave you paying out of pocket for future claims after you buy a house

If you are buying a new home in Baton Rouge and need help with selecting the right insurance coverage for a new home purchase click on the button below to get started

You can request home insurance quotes to your email and when you are ready and have questions you can reach out to FM Agency Group and speak to a coverage advisor to help you find the right policy for your new home purchase 

If you want to get started request your homeowners insurance proposals delivered to your email click here

Loss of rental income coverage vs Rent default insurance

One of the most important insurance coverage options for real estate investors is loss of rental income

But most insurance policies don’t automatically provide rental income loss coverage

When a claim happens and your rental property is no longer safe for your tenant to occupy they must leave

Your tenant is no longer going to pay you rent and when that happens you may no longer be cash positive on the property

At FM Agency Group we help show rental property investors how to use insurance to protect their investments

 

LOSS OF RENTAL INCOME COVERAGE

Landlord rental property owners can purchase this coverage to provide a monthly benefit to you so will not be out of pocket when your tenant will no longer pay rent

This coverage is provided as the result of a claim and not a stand alone loss of rental coverage

When you need to make a claim on your home and your home is no longer habitable the insurance company will provide you loss of rental income based on the time it takes to rebuild your property per the estimate

If there is a kitchen fire and the estimate is for 2 months of repairs you will get loss of rental income for two months in addition to the estimate for damages to rebuild your kitchen

The cost is included in a rental dwelling three DWG-3 policy form and could be as low as $7 a month

Check your rental property insurance policy to see if you have loss of rental income because not all policies include this coverage and it is too important to not have on your policy

 

RENT DEFAULT INSURANCE COVERAGE

This is purchased as a stand alone insurance coverage and does not apply when your property is damaged and no longer habitable

This coverage is based on your tenant no longer occupying your property and breaks the lease

Yes you can just keep the deposit but rent default insurance can pay you up to 4 months of loss of rental income

The cost could run as much as $500 a year and it is based off of the monthly rent

There are many pre-qualification elements that your tenant must meet before the policy can be issued

 

Here are some of the most important rental property insurance coverages you need

  • Loss of Rental Income
  • Lawsuit Protection
  • Sewer back up
  • Service line replacement
  • Equipment Breakdown

Not all policies include all of the these coverage options but if you are interested in one of our insurance proposals for real estate investors just complete the quick for below

 

 

Do you have enough insurance in New Orleans to rebuild your home?

The rising cost of lumber prices has been well documented this year

When the cost of lumber goes up in New Orleans, the cost to rebuild your home increases

If you don’t have enough insurance to rebuild your home after a devastating loss you could be left going into your bank account to pay a contractor to rebuild

 

WHAT CAN YOU DO TO MAKE SURE THIS DOESN’T HAPPEN?

Every New Orleans homeowners insurance policy has an inflation guard endorsement from 1% to usually 4%

Every renewal the insurance company will automatically raise the insured values on the policy up to the %

This is to keep your policy up to date with the rising cost of materials to rebuild

But sometimes if your home insurance policy was not properly reviewed you could be under insured and exposed to a large financial loss

An insurance broker can only use a guide or rule of thumb to determine the replacement cost of your home

An insurance company will have a replacement cost estimator but once again this is a guide

Only a residential homebuilder or contractor will know the cost to rebuild your home using the cost of materials today

 

RULE OF THUMB

If you don’t know a contractor or homebuilder use the price per square foot to determine the insured replacement cost on your homeowners insurance policy

Just a few years ago $100 a square foot was a bottom used on most policies but now you could be closer to $150 a square foot to rebuild

example) 2500 square foot home x $150 = $375,000 cost to rebuild 

Each home is used with different materials so it is best to either have a contractor give you an estimate or just ask him for an average price per square foot using today’s cost of lumber and materials

 

ANNUAL HOME INSURANCE RENEWAL REVIEWS

When is a good time to review your replacement cost of your home?

At each annual renewal is a good time to review the current replacement cost of your home

Over the past year lumber prices have soared due to strong demand and tight supply

Lumber prices were three times higher in September 2020 compared to September 2019

The cost of a 2×4 has gone up 158% and studs have risen 164%

When this happens the cost to rebuild a home increases and maybe your home was insured properly a few years ago it may now be under insured

 

If you need to review the reconstruction cost of your home and your current homeowners insurance policy with a better insurance broker

give us a call 504.348.3131 or complete the quick form below

 

2 ways to get more money after a roof claim

Missing shingles after a strong hurricane along the Gulf Coast does not always result in the insurance company opening up their checkbook and giving you a new roof as some of us have discovered

We had a customer missing over 60 shingles and the claim rep for the homeowners insurance company was thinking repair over roof replacement

We had to get involved on that claim and help the inside company claim representative understand the roof was beyond repair

After helping customers process hundreds of claims there have been a few common questions or issues that have come up

 

YOUR FIRST CLAIM CHECK IS PROBABLY NOT YOUR LAST

Just because the insurance company sends you a check and an estimate that is probably not the end of your claim

Most estimates will have a line item for recoverable depreciation

This is most common on a roof claim

Most insurance companies will issue you a first check that has a deduction for depreciation (age of your roof) although you have a replacement cost policy not an actual cash value policy

You must replace your roof and provide a paid invoice to collect the remaining recoverable depreciation

These two checks should equal the cost to you to replace your roof

Recoverable depreciation is available to you but you must submit proof of roof replacement to get it

The insurance company is not going to mail you recoverable depreciation unless it is requested

ROOF REPLACEMENT DISCOUNT

Once you replace your roof you are now eligible for a new roof discount usually up to 10% off your current rate

But once again the insurance company is not going to give you this discount unless you request it

If new customers can get a new roof discount existing customers should too

If you have a new roof and have pictures and a paid invoice you should be eligible for a nice discount off your current rate

If you are currently working with an insurance broker they should request this discount for you

If you have not received recoverable depreciation and your new roof discount on your current home insurance policy you may eligible to get more money owed to you from your insurance company

Builders risk liability insurance for real estate investors in New Orleans

The builders risk policy you purchased for a new construction project or a renovation on a rental property probably does not include premises liability

In the New Orleans area you need premises liability to protect you from slip, trip and fall claims and most builders risk or renovation policies don’t include the valuable coverage

What is premises liability?

It protects you from bodily injury and property damage claims that you are legally liable to others and if you are not legally liable but still get sued the coverage provides you a legal defense if you receive a plaintiff attorney letter in the mail

Your insurance claim representative will investigate the claim to either deny or settle on your behalf

 

Recent claim examples involving Premises Liability

The owner of the house is showing the new home that was just built to his friends

The friend’s wife trips and falls down

She turns her ankle and can no longer go to work for a few weeks and may require surgery

She hires a billboard attorney and sends the demand letter to the owner of the house

Premises Liability applies here and will review the claim on your behalf

Without premises liability coverage you would be left handling your liability defense out of your own pocket and savings account

 

How much is a Premises Liability policy on a Builders Risk or Renovation policy in New Orleans?

As low as $330 for the year and you get 1,000,000 of protection

Can you write the premises liability policy in a personal name or LLC?

Both it doesn’t matter

You can get liability protection in your personal name or the LLC that owns the property

 

Can I add more than one property to the Premises Liability policy?

You can add up to 100 properties on one policy and pay one bill monthly

 

Premises liability is for real estate investors but also new homebuyers that are building new construction

If you are building a new home you will need to purchase a builders risk policy or a homeowners insurance policy with the under construction endorsement

Not all policies include Premises Liability so you need to check to see if you have this coverage

A good insurance broker can help you find the right policy for you and you can get 1,000,000 of insurance protection for as low as $330 a year

Complete the quick form to get started

10 ways to lower your New Orleans homeowners insurance rate

Did your homeowners insurance renewal renewal go up?

Discover tips to lower your homeowners insurance rate

According to the Insurance Information Institute, the cost of homeowners insurance has increased significantly over the past several years, mainly due to the rising number of hurricanes, the high cost of home repairs, and the emergence of mold claims.

When you are looking at your insurance renewal,

It’s a good idea to contact your the best insurance broker before you renew to make sure you know the cost of insurance and that you are well-informed of any issues or endorsements you may be missing.

A proper review of your policy is not just a smart thing to do, but it protects yourself from a financially devastating event.

Below are 10 ways to help control the cost of New Orleans homeowners insurance so you keep more of your money instead of giving it away to the insurance company

Raise your deductible

If you have a low deductible of $1000, raising it to $2500 or $5,000 could save you up to 25% on your Homeowners insurance renewal rate.  

Combine your home and auto policies

Many companies offer discounts if you buy your homeowners and auto insurance policies from them. It’s also more convenient than buying separate policies from separate insurance companies.

The only problem in ​New Orleans your options are limited finding any insurance company that still writes auto and homeowners insurance together.

The majority of homeowners insurance companies writing new policies only offer homeowners insurance but they do offer companion discounts just for having your other policies with the same agency such as auto, homeowners, flood and an umbrella protection policy.

Ask about other discounts

Make sure you get every discount you’re eligible for. There are generally discounts available for monitored burglar and fire alarm systems, hip shaped roof instead of gable shape, brick construction instead of frame and if you’re over 55 and retired, you may qualify for an additional discount.

Each insurance company offers their own individual discounts so discounts will vary.

Don’t buy more coverage than you need

Make sure you’re only buying the coverage you need. It doesn’t make sense to pay for $100,000 of contents coverage if your personal property is only worth $25,000.

You can adjust your personal property or contents coverage to the value of the property you own. This is the limit for the property you own and moved inside your house.

All homeowners policies have limitations on specialty items such as jewelry, guns, collectibles, art etc.

Don’t assume everything is covered up the to full value and be careful “mysterious disappearance or lost it” are not automatically covered.

Consider scheduling any valuable items on the policy or purchase a stand alone personal articles policy to make sure your most valuable items are covered.

Understand your coverage

Make sure you understand your policy and exactly what is and what isn’t covered. You don’t want any expensive surprises down the road. For example, flood and earthquake damage aren’t covered by a standard policy – you’ll need separate coverage. And keep in mind, your home must be insured for replacement cost, not market value

Market value is the price of homes that have been sold recently.  This number rises and falls with the real estate market and has nothing to do with the cost to hire a contractor to rebuild your home

If everything were covered under a homeowners policy, you would only receive a receipt and a handshake. The policy you receive in the mail is filled with pages of exclusions or what the insurance will not cover.

Not sure what is covered?  

Ask your insurance broker to explain or if you have a “what if” question.  

Don’t wait until after a claim to discover a claim denial.

Keep your coverage updated

Review your policy and the value of your personal property once a year, before your New Orleans homeowners insurance policy is due for renewal.

Make sure your coverage is still appropriate for your needs and situation.

Things change since the inception of your policy and most common is not telling your insurance agent of any changes.

Did you buy a dog?

Did you get a trampoline for Christmas?

Did you decide to get a swimming pool?

These changes are important to a homeowners policy. Some insurance companies will exclude policy coverage and most homeowners policy either exclude animal liability or limit the coverage but you have to endorse the policy to get the protection you need if your family pet is having a bad day and decides to bite someone.

Make your home a better risk

Consider steps you can take to make your home less expensive to insure.

Are there upgrades you made to your house?

Most insurance policies will provide policy discounts for upgrades to your

  • roof
  • heating air conditioning
  • electrical
  • plumbing

Avoid “red flag” risks

Be careful when you buy a new dog or finally install the swimming pool.

There is a prohibited breed of dog list.  If you own one of these, your policy will not provide you any legal defense if there is a dog bite claim and most policies don’t provide any animal liability unless you endorse the policy.

If you do decide to get a pool be careful not to get a diving board or slide.

Most companies will not extend any liability for claims involving a diving board or slide

Boost your credit score

Insurance companies are increasingly using credit information to calculate insurance premiums. Limit your number of open credit accounts, don’t max out your credit cards, and pay your bills on time to keep your credit score healthy.

Equifax, TransUnion and Experian endorse the website and it is the official site for consumers to obtain their credit report once a year. You can request a copy of your credit report for free once a year https://www.annualcreditreport.com

Look beyond price

Don’t compare price alone. Consider each company’s customer service, locality and customer reviews. You want a home insurance partner who will be there for you if and when disaster strikes.

Request your homeowners insurance renewal review using the quick form below

If I buy a dog do I need to call my New Orleans insurance broker?

Dog Bite Liability insurance and your New Orleans homeowners insurance policy is something that is not automatically included in every policy

I always thought about a dog biting a person and the damages that incur as a result

But the other day we had a claim involving a dog biting a neighbor’s dog

Would that be covered?

Your dog may be the most innocent, sweet dog you have ever owned, 

but what if,

for some unknown reason,

your family dog doesn’t get along with your neighbor’s dog and it causes injury to your neighbor’s dog?

Medical bills are just as expensive for dogs

 

Dog Bite Liability insurance is not automatically included in your policy

 

Most New Orleans homeowners insurance policies today must be endorsed to include a sublimit of liability protection for Dog bite liability

A usual limit is 25,000 of liability protection can purchased with a limit as high as 500,000 may be available

 

And your dog can’t be on the prohibited breed of dog list

  • Pit Bull Terriers
  • Staffordshire Terriers
  • Rottweilers
  • German Shepherds
  • Presa Canarios
  • Chows Chows
  • Doberman Pinschers
  • Akitas
  • Wolf-hybrids
  • Mastiffs
  • Cane Corsos
  • Great Danes
  • Alaskan Malamutes
  • Siberian Huskies

The list can vary between insurance companies and their own underwriting department

Also a mix breed of any of the above could exclude liability as well

 

What can you do now if you own a dog in New Orleans?

Check your homeowners policy for dog bite liability

If so, what is the limit?

If you don’t see an endorsement,

call your insurance broker and ask what is the animal liability limit on your home insurance policy

What’s this all about?

If you are considering buying a dog,

make sure it is not on the prohibited breed list or you will be paying all claims out of your own savings account

If it is not on the list,

take a quick look at your policy or call your insurance broker to add the animal liability endorsement

At FM Agency Group we can add animal liability on a New Orleans homeowners insurance policy and also we can get it included on rental property insurance policy for real estate investors

Complete the quick form below to get started

Dog bite insurance and your New Orleans homeowners policy

Lose your dog or lose your homeowners insurance is not always the best option for your family

When you work the best insurance broker they are able to find an insurance company that will help you

You may have a dog that you believe “would never bite someone” but the facts show dog bite claims are very costly to the insurance industry

The average settlement from a dog bite claim was $43,653 in 2019

With medical costs on the rise and a growing litigious environment,

you are more than likely going to be sued if your pet bites someone or causes an injury because they chased or scared someone and an injury was sustained

Your dog doesn’t have to actually bite someone for a claim to be filed against you

Just an alleged incident can cost you

 

Not all New Orleans homeowners insurance policies cover dog bite liability

and if you have one of the breed of dogs on the prohibited list

more than likely you are on your own defending any alleged dog bite claim by a neighbor, friend or family member (not living in household) and paying out of your savings account

 

Here is a list of prohibited breed of dogs from one of our insurance companies we represent (list can vary with each company)

  • Akitas
  • American Bulldogs
  • Beaucerons
  • Caucasian Mountain Dogs
  • Chow Chow
  • Doberman Pinschers
  • German Shepherds
  • Great Danes
  • Pit Bulls
  • Rottweilers
  • Staffordshire Terriers
  • Wolf Hybrids

 

If your family pet is listed above, it does not indicate your dog is vicious and likely will attack someone but is more likely to be involved in an animal liability claim

 

What to do if you own a dog on the list above?

 

Well “get rid of it” is the simple answer,

but for most family pets,

a dog can be like another family member.

 

1. First thing to do is contact your insurance broker and ask if owning your breed of dog will exclude all coverage under you New Orleans homeowners insurance policy

It may have been an exclusion to coverage when you initiated the policy and either the agent didn’t ask or you didn’t disclose the breed of dog or you brought home your dog after the policy was sold and didn’t notify your agent.

Either way the entire policy may be voided so ask if there is an issue with policy coverage.

 

2. Find a homeowners policy that will allow your breed of dog

If you have a prohibited breed of dog, it is possible some insurance companies will allow you to keep your home insurance policy, but will not extend liability to any claim involving an alleged dog bite or attack.

 

A simple email to your agent and ask if there is a coverage issue only takes a few seconds

What if my homeowners insurance company is going to cancel my policy because of a dog bite claim?

 

It happens

An unexpected or alleged claim against your dog

There is nothing you could have done

Most homeowners companies will cancel you after a dog bite claim or surcharge your insurance rate at renewal

 

If you are being canceled, your options are limited

The liability claim is now on your record and most insurance companies pull a CLUE report

Insurance companies share your claim history and when you apply for a new homeowners policy,

the new home insurance company can view your claim history usually up to 7 years

So before you attempt to not disclose your dog bite liability claim to the new insurance company,

save yourself some time and just ask if the homeowners insurance company will accept the application with a dog bite claim.

 

What to do if every company has declined to write a new homeowners insurance policy because of your claims history?

 

Good News

We have an insurance company that will consider your application for dog bite insurance coverage with a dog bite claim on your record

All applications are subject to underwriting approval

The insurance company will write the policy but you will not get any animal or dog bite liability insurance coverage

 

But the insurance quote will be expensive and more than my current policy?

 

Not so

We are seeing on some insurance quote proposals a lower premium than your existing policy that is being canceled

 

What’s this all about?

After you received a notice of cancellation on your homeowners policy and you decided you don’t want to get rid of your dog,

you now have an option

Complete our quick form or contact us to discuss your claim history so we can determine if we can help you get dog bite insurance in New Orleans you need without having to get rid of your dog

 

 

A better insurance broker for New Orleans Real Estate investors

We’re building a better insurance broker for real estate investors by providing lower rates on New Orleans rental property insurance

Our rental property insurance market includes a lot of older homes and not all insurance company want to write older homes

You need to work with the best insurance broker to find you the coverage you need

Here are some of the policies we offer for Real Estate Investors

 

VACANT HOME INSURANCE

When a property is up for sale with no intention of a getting a tenant

You need coverage for fire, wind, hail, vandalism and water damage

We can provide the insurance protection on a per month basis so you don’t pay for more insurance than you need

RENOVATION HOME INSURANCE

When you purchase an investment property in New Orleans it is probably going to need a renovation and if you don’t intend to move a tenant in within 30 days you need to consider a renovation policy

Depending the extent of the renovation you may just need a two month policy and we can provide you a renovation policy on a month to month basis and when you are ready for a tenant we can just endorse the policy to correct classification or if you decide to flip the house and put it back up for sale we can make it a vacant home insurance policy

RENTAL PROPERTY LIABILITY INSURANCE

Each policy includes 1,000,000 of premises liability which covers one of the most common claims against landlords….the slip,trip and fall claim

MORE THAN ONE PROPERTY ON A POLICY

For some real estate investors having more than one property can be a difficult task keeping up with the renewal insurance bills

At FM Agency Group we can provide a single policy solution for all your investment properties in New Orleans and we can provide the coverage each property needs such as a vacant home insurance, renovation home insurance, short term lease and annual leased properties

We want to help you lower your expenses so you can buy more rental property

Complete the quick form below to get started