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Simplifying Building Insurance Since 1993

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Securing Building Insurance is a highly specialized process and one I’m quite familiar with.

With access to building insurance carriers and programs, I can help your company obtain multiple building insurance quotes. I help my prospects and clients turn a complex underwriting and policy selection process into a simplified one.

Some of the companies I represent for Building Insurance include Allied Insurance, Capital Insurance Group, CIBA, Cincinnati Insurance, Deans & Homer, Lloyd’s of London, Mutual of Enumclaw, Oregon Mutual, Travelers Insurance, Philadelphia Insurance, Liberty Mutual Insurance, and many more as needed!

What are my choices with regard to Building Insurance?

Each insurance company I work with has a specific target of what their ideal insured would be.  Some favor older properties, some favor properties built within the past 25 years, some favor habitational risks.
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Reach out to me if you’re considering Building Insurance for the first time or renewing an existing policy. I will discuss your Building Insurance Coverage needs with you, address how each coverage works and assess how each fits into your risk management program. I will provide you with comparative Building Insurance quotes from multiple insurance carriers so you can get the best possible rate.

 

Get better deals using this Building Insurance Due Diligence Checklist

As an insurance broker I help property owners manage risk through Building Insurance Coverage.​

I offer Building Insurance in the following states: Alabama, Alaska, Arizona, Arkansas, California, Colorado, Connecticut, Delaware, Florida, Georgia, Hawaii, Idaho, Illinois, Indiana, Iowa, Kansas, Kentucky, Louisiana, Maryland, Massachusetts, Michigan, Minnesota, Mississippi, Montana, Nebraska, Nevada, New Jersey, New Mexico, North Carolina, North Dakota, Ohio, Oklahoma, Oregon, Pennsylvania, South Carolina, Tennessee, Texas, Utah, Vermont, Virginia, Washington, Wisconsin, and Wyoming. I have the building insurance coverage you need.

Building insurance is the easiest way to protect your investment real estate from financial ruin. Building insurance transfers your risk of loss to the insurance company. Keeping you from financial ruin is why your lender requires that your property be insured, and it protects them from loss.

How to Pick Your Insurance Agent

To ensure you are adequately covered, you should first select an insurance agent or broker with experience insuring investment property. Insuring your investment property is different than insuring your personal home and auto. For instance, your rental property generates rental income, and your residence does not. While most homeowner policies include loss of use coverage for when you cannot stay in your damaged home, the same cannot be said about a building insurance policy. 

Homeowner policies include lots of built-in coverage, while a commercial policy for investment property does not. Commercial building insurance policies are customized to meet your specific building needs. If you work with an inexperienced insurance agent, you might find that you are not covered like you thought when you have a claim. 
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When you choose an experienced building insurance agent, we will identify and explain the exposures you face and the coverage you need.
The terms Insurance agent and insurance broker can be used interchangeably; different states have different classifications for an agent and broker. For our purposes, the terms are used interchangeably.

Independent agent versus direct writer

An independent insurance agent has access to multiple insurance companies, which allows us to find the best fit for your needs. A direct writer represents one company and is limited to that company. Historically, eighty-plus percent of business insurance has been written through independent agents, while sixty-plus percent of personal lines insurance has been written through direct writers. 2019 Market Share Report.
I have been an insurance agent since 1990, an independent agent since 1993, and a real estate investor since 1997 so I have the experience you need to underwrite your building insurance.

Building Types

Investment properties come in all shapes and sizes and are classified for insurance by the type of tenant that occupies the building.

• Personal / Residential: Single Family, Duplex, Triplex, and Fourplex
• Commercial:
  • Habitational: Apartment Buildings and Mixed Use (Habitational with Retail below).
  • Retail
  • Office, 
  • Industrial - Warehouse
  • Flex space
  • Self-storage.

Personal / Residential properties can be written with the same company and agent who writes your home and auto. If you are buying the investment property in your personal name, it is a good idea to write with your homeowner agent and add an Umbrella that goes over both your home, auto, and rental property.
For Commercial properties, the age of the building and type of tenant dictates the underwriting acceptability for companies who will offer to provide coverage. If your property is newer with lesser hazard exposure for tenants, more companies will agree to provide coverage. As your property gets older and the type of tenants increase in perceived hazard, the number of companies willing to offer coverage will decrease, and your price will go up.

Building Insurance Due Diligence

When you buy or build an investment property, you create income and or greater future value. To determine the price you are willing to pay, you analyze the seller’s income and expense records and look for areas you can improve on to create value and cash flow. Every investor knows to analyze the seller’s numbers, but too often, the newbie investor makes the mistake of assuming they will match the seller’s historical operating expenses. Only after their due diligence window has closed do they realize this is not so. 

For building insurance, each insurance company and every underwriter look at the property and owner differently. They consider the property’s physical condition and the operator’s experience. If the seller has multiple properties on one policy and you only have one, the seller is likely getting a discount for insuring multiple properties. Do not forget deductibles; if the seller has a high deductible and your lender will only let you have a low deductible, again, your insurance cost will be more. 

To avoid any surprises, you must engage your insurance agent early in the process. You would not wait to engage your lender, so why wait to engage your insurance broker? For your best loan rate, the lender will underwrite you and the property and offer a rate representative of what they see as the risk of you not repaying the loan. 
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The insurance underwriter engages in a similar underwriting process to determine the likelihood of your property having a claim. To get your best insurance rates, it takes time, especially if your property is older or has any issues that require an explanation.

Due Diligence Checklist

Coverage You Need
​The basic coverage you need for your investment property is referred to as Property and Casualty, or Property and Liability. Property is your property, and Casualty is other persons or property that you can be responsible for if you damage them.
For Property, you need to insure the Building and Business Income or Loss of Rents. For Liability, you need General Liability. From here, we build coverage based on your specific property.
Beyond the basics, we can tailor your policy to include more perils, i.e.:

• Flood
• Earthquake
• Equipment Breakdown
• Ordinance or Law
• Backup of Sewer or Drain

to name a few. 

Coverage Checklist

Limits
Your building insurance policy limit is based on the cost to rebuild your building. We use a replacement cost estimator to determine the proper amount for building materials and labor specific to the zip code where your building is located. 

The replacement cost is different than the market price. The market price reflects the price where a buyer and seller meet. This price likely reflects the net operating income and market cap rate. 

The replacement cost matters most on one day, the day of your claim. If it is wrong on the day of your claim, you will have a less than desirable experience. Being underinsured is not just a matter of not having enough in a total loss; it can result in coinsurance penalties for a partial loss. Coinsurance penalties are why it is so important to get your replacement cost limit right from the beginning. 

Business Income, also referred to as Business Interruption or Loss of Rents protects you from losing rents when a covered cause of loss damages your building. The limit can be set with a dollar limit that caps the most you will receive or a time limit. 
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Liability limits typically start at $1,000,000, and you can buy additional limits. Most investors start with lower limits, then add additional limits as their equity and wealth grow. Additional liability limits are easy to purchase with an Umbrella. 

Building Condition

What is the condition of your building? Are you building from the ground up, making significant improvements? Is it vacant? All these conditions need to be identified and discussed with your insurance agent. A building that does not have an occupancy permit requires different coverage. 

How old is your building? Have the systems (roof, electrical, plumbing & HVAC) been updated? When buying an older building, you must ask these questions. If you do not know, the underwriter will not give you credit for new systems, and your price will go up.

Are you interested in finding out more? Perhaps you would like a quote?
​Please contact me, J. Darrin Gross, an independent building insurance agent at 503-504-7619 or fill out the request for a quote here.

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