Insurance for Landlords with Multiple Properties

For a long time, we have been looking for a program that would simplify the life of landlords with multiple properties. When it comes to landlords who have multiple properties, insurance can be a pain. You either have to have a single policy for every property (this would be a personal lines policy like a dwelling fire policy), or if you are lucky enough to have enough properties you can list them on a commercial property (a commercial policy allows you to have one policy with a list of properties). But if you happen to have 6 or 7 properties you are kind of stuck in the middle. Until now! Nationwide Insurance Company recently made their business owners policy available to landlords that have up to 12 properties. This includes single family homes, duplexes, tri-plexes, and 4-plexes. They also will do insurance for larger apartment buildings. This would allow investors with growing portfolios to enjoy benefits of a single commercial policy for their properties. What are those benefits?

 

  1. Simplicity – Let’s be real for a second. Everyone likes coverage, but most landlords make their insurance decisions on price. But how much time to you spend handling the various policies and paperwork BS that you have. Likely more than you should. One policy for all your properties minimize this.
  2. Liability – Generally Commercial policies generally start at 1 Million in liability coverage. Their liability coverage tends to be a little broader and include coverage for personal and advertising injury. We at Gila Insurance Group believe personal injury is a key coverage for landlords. Medical Payments is generally a higher amount on commercial policies.
  3. Property Coverage – Coverage on a commercial policy and a personal lines policy is similar. In that the homes would still be insured at the replacement cost, subject to a deductible and covered at on a “special” policy form. Meaning that unless its excluded its covered. Unlike personal lines policies, most commercial policies do include coverage automatically for back up of sewers and drains. Like the individual personal lines policies coverage like flood and earthquake are still excluded. If you need this coverage you will still need a different policy to ensure you get this coverage.
  4. Personal property – Not generally an issue for landlords, unless you are renting furnished properties, but here is one of the greatest benefits of a commercial policy for landlords. A business owners policy covers personal property in apartments, rooms, or common areas furnished by you as building not personal property. Also, personal property owned by you that is an appliance used for refrigerating, ventilating, cooking, dishwashing or laundering is actually considered building not personal property. That is huge as that means you can get better coverage on those appliances you are furnishing your tenants that you would on a personal lines policy.
  5. Loss of Use/Loss of Rents – Covered in a similar way on both policies. This only steps in if you have had a covered loss (the building burns down, you aren’t getting rent, but have to pay the mortgage, we pay your rent) and you are responsible for showing the rent that you have lost.
  6. Exceptions – Not everything can be perfect, right? So, what are the drawbacks of doing it this way? There are 2.
    1. On a personal line or dwelling fire policy you usually get some coverage for other structures automatically. On a commercial line policy, you don’t. What are other structures? These would be shops, sheds, detached garages, fences. So, if you have one of these that you are worried about you would need to list the building on the policy.
    2. On a personal lines policy they generally exclude ordinance and law coverage (the idea that a city makes an ordinance that shingles have to be pink, then grandfather non-pink shingles until you have to get a building permit and find out that pink shingles cost way more than grey shingles), but then personal lines policies come back and give you 10% of the value of the home for ordinance and law coverage (I know insurance is confusing). That is not the case on a commercial policy. It can be covered, but it has to be added. So, make sure its there.

The short of it, is this is awesome. We at Gila Insurance Group have been searching for this for 3 years and have it. If you are a landlord with multiple properties to insure, call us at +1-928-428-6440 and let’s get a policy in place for you today!