1 or 2 Dwellings? - CA

[TiredAgent]

Part One: We recently aquired a book of business (including the bad stuff, part of the deal) in Oakland, California. One of the risks has three duplex dwelling on one lot. One dwelling is owner occupied (HO3) and the other two are tenant occupied (DP3), each has its own utilities and postal address. Been with the same carrier for at least 15 years. The carrier recently inspected the risk and determined that since two of the dwellings are connected by a large redwood deck it now considers the two as ONE large dwelling (4-family). Owners say the deck was there when they bought the property in the 70s.

Part Two: Same location. Since there are 6 units on 1 lot, it is considered a commercial risk and the whole account should be rewritten (asap) to commerical with an HO6 for the owners stuff.

Is the carrier full of it

[LadyBroker]

I can't speak for every carrier, but it seems like your carrier wants off of it. Have you tried your other standard markets?

[TiredAgent]

I can't speak for every carrier, but it seems like your carrier wants off of it. Have you tried your other standard markets?

Thanks for the reply.

It's no question the current carrier wants off. I just need to sound off about the 1 or 2 building ruling.

There are other issues with this risk that makes the standard markets not wanting to touch it (read: updates, lack of).

As an update the surplus lines commercial quote I got is about 4x what they are paying. They said they got a quote from their local direct writer for less than before. I just and said, "good luck, keep in touch".

[SkiingBroker]

I like your disengagement line "good luck, keep in touch"

[uwalka03]

Is it one owner for all the units (who lives in one and rents out the rest?). The most units any of my home carriers will take for one "location" (like a 3 or 4 plex) on a personal lines policy is 4. We usually set this up as one owner occupied HO3 with shared walls, and the rest tenant occupied dwelling policies with shared walls. There will be multiple policies, but most carriers will give multiple policy discounts on secondary dwellings as long as they control the primary. If the risk is not "preferred" or "standard" due to age or updates, their are carriers that might still write it as a personal lines policy. Foremost, American Reliabile, American Modern, and CSE come to mind as potentials.

You can write this commercially, however, it tends to be more expensive with less coverage. Good luck!

[mccluney]

Based on the facts as presented, it would seem hard to have the risk seen as a "personal lines" exposure. Best for agent to examine the risk and make a full disclosure including pictures. Companies in CA must offer earthquake coverage on risks with 4 residential units or less. They do not want the EQ exposure, so they will draw the line on what could be considered as
a "commerical risk." California state law for offering EQ does not apply to commercial. Reinsurance considerations also apply limitations in the consideration. I would be suprised to find any company to classify this exposure as a personal lines
account.