Insurance help???

[bryna]

A little background...

I purchased a rental property in town on which I built my garage. The garage is 36 X 44 with a loft, 3/4 bathroom, its heated, cooled, has a lift with three garage doors. The building is for my use only. It is not used by the renters of the house on the same property. No business is going on there, its simply for my use.

I have the property insurance through one of the largest Insurance companies... I have liability and fire insurance (landlord's policy) on the rental home. When I went in to insure my garage and since I wanted to insure it seperately from the rental home they created a business policy. The problem I have here is its very expensive and I am only covered to $70000 for the structure. (I couldn't rebuild it for that btw). My agent said my personal property would be covered by my home-owners insurance.

This just seems to throw up all kinds of red flags to me... its not a business, I don't create income off the garage, I'm worried about my personal property within and my investment. Normally the outbuildings are insured to 10% the policy on the home... no way would that work as its a rental home... no where near the value I'd put on it to cover the garage and contents.

I'm sure this is clear as mud but I insure my residence at a much better rate and I feel I would be covered if disaster struck there.... my new garage I'm not so sure... any help or recommendations would be greatly appreciated.


My Thread.... http://www.garagejournal.com/forum/showthread.php?t=38411

 

[May Pop]

Get a different insurance company and or agent.Times are tight and someone will work with you.

 

[Kirkz28]

Talk to your agent. My biggest concern is that you are underinsured on the garage - if your agent is aware of that, they should have be encouraging you to get the value up (not down). I wouldn't be so worried about whether it's a business policy or not, but again just confirm with your agent why they went that route - they may not have had another option, since you didn't want the garage on the same policy as the rental house.

You also mentioned the 10% limit for outbuildings - most policies use this as the default, but they also usually allow you to increase the value (for extra money of course). Contents would be a separate issue normally.

I would also question the contents issue. Normally contents away from a primary structure are only covered temporarily. Ie. contents in a detached garage on the same property as your house would be covered forever, but contents at the garage where the rental property is might not be covered by your house policy for longer than a few days.

Good luck!

 

[SuperSocket]

Have the lot split into two properties, would be easy to insure then... unless if it can not be split?

 

[southalabama]

ditto the post above.....find another agent and/or insurance company....

 

[Cuda]

Find the best insurance company you can and then purchase a case of KY Jelly because no matter what you do, if you have to file a claim, you're gonna need the jelly.

 

[ptschram]

This is much harder than most folks expect-BTDT.

If you're not living on-site, and not running it as a business, these are things that frighten insurance companies.

The real estate should be covered under the same policy as the house. The contents should be covered under an "inland marine policy" which is about the only way to insure tools that are not being used in trade, not stored at your home and tools that are probably more expensive than what your insurance agent expects or finds common.

I had a horrible time finding a policy to cover my tools and equipment when we were between houses/shops. An Inland Marine Policy did the job.

Beware-your homeowners insurance almost certainly has a stupidly low limit on personal tools not used in commerce. Tools used in commerce typically are not covered under a homeowners policy.

 

[rsanter]

I have a warehouse that I keep some cars and stuff of mine in. I found its cheaper to have a buisness policy that will cover 1mil liability as well as about $70k for contents for $500 a year than it is to argue with these people anout the whole personal use aspect. and many companies will not do the whole personal use thing because they dont have a catagory for it. no catagory means worse case scenerio which means big bucks of no coverage for you

go down and get a buisness lic. call it (your name) automotive and performance or something like that. get your insurance and be done

then register to go to SEMA using your buisness name and address

bob

 

[formek]

Get a different insurance company and or agent.Times are tight and someone will work with you.

X2
I dont know much about insurance I would think you could get an umbrella policy and do away with the commercial policy. So With that said I agree with the post above get a new agent

 

[ptschram]

go down and get a buisness lic. call it (your name) automotive and performance or something like that. get your insurance and be done


bob

This can cause taxation and zoning issues.

 

[Skyline]

X2
I dont know much about insurance I would think you could get an umbrella policy and do away with the commercial policy. So With that said I agree with the post above get a new agent

I agree that a creative, expereinced new insurance agent could probably figure out a better way to write this. But an "Umbrella Policy" is NOT the answer. An umbrella policy is a liability policy; it will not cover fire and theft, and it is designed to supplement the base liability limits of your underlying personal or business coverage. A great thing to have, but has absolutely NOTHING to do with the OP's problems.

 

[madstat]

I used to work for a P&C insurance carrier. I would call an "independent" insurance agent (not a captured agent like state farm or all state that only sell one carrier) but an independent who can quote you for multiple different carriers, these types of agents are getting rarer but IMO they are the most knowledgable about local insurance biz which is heavily regulated by state and they can be the most flexible since they can offer many different products from different carriers.

I don't know your current insurance agent's situation but from what I can tell, you should be able to get this structure insured under a standard "CDF" policy. CDF = "Continuous Dwelling Fire". It's similar to a homeowners (HO) policy but for places you don't live in. CDF is what people who need to insure their beach cottages etc. have. IIRC CDF is more expensive than HO (the rate that is). BUT! as ptschram pointed out, you may not be able to get the coverage you want (really expensive garage, lots of expensive tools) under CDF, personal policies just usually aren't written to accommodate these things. This is perhaps why your company wants to underwrite this with a business policy. It quite possibly could be the cheapest way for you to get the coverage you want (or as much of it as possible).

Side note, the limit on my garage is 18k, who can I hire to build me a two car garage for 18k?

 

[formek]

I agree that a creative, expereinced new insurance agent could probably figure out a better way to write this. But an "Umbrella Policy" is NOT the answer. An umbrella policy is a liability policy; it will not cover fire and theft, and it is designed to supplement the base liability limits of your underlying personal or business coverage. A great thing to have, but has absolutely NOTHING to do with the OP's problems.

X2
I dont know much about insurance I would think you could get an umbrella policy and do away with the commercial policy. So With that said I agree with the post above get a new agent

Thank you for the correction

 

[FJ 432]

I would also question the contents issue. Normally contents away from a primary structure are only covered temporarily. Ie. contents in a detached garage on the same property as your house would be covered forever, but contents at the garage where the rental property is might not be covered by your house policy for longer than a few days.

Good luck!

This is correct. Your homeowner's policy has an exclusion whereas any contents/personal property is not covered at another residence owned by you except under a temporary basis.

I was an homeowners adjuster for a large company.

Your situation would require a special agent (independent or otherwise) that understands your needs.

 

[darkk]

My agent said my personal property would be covered by my home-owners insurance.

If by personal property you mean your tools, I think you better get that in writing. The contents of a garage are usually only covered for a set percentage of the building value. Trust me here, if there is a catastrophe, you will get pennies on the dollar for your tools if they are not insured separately. You can get an insurance policy on the tools only which is what I would suggest.

 

[brian964]

Find another insurance company. In my experience it is better getting quotes online. But to be safe you could compare rates online, pick the best offer and try a local agency to see if they can match it or do better: www.quotes-center.com

 

[bryna]

This is obviously going to take some time to figure out completely. My current agent is digging into my policy (I'm sure to find I'm not adequately covered). And I took all my vehicles, etc to a local independent agent I know to have him brainstorm and give me some quotes.

I went through a theft with this company once where we were gutting a farm house we bought. I was just finishing up when someone broke in and took nearly 10K in tools. They put up a fuss saying my construction tools should have been under a business policy and balked at my replacement costs.... talking saw, siding break, generator, air compressor, etc. I had to fight with them and prove that I am not a contractor (which I am not). My tools are my hobby and I find enjoyment in helping my friends with various projects. Not to mention I've gutted and rebuilt several of the homes we have lived in... anyway, I don't want to go through it again.