“We are seeing a lot more of this class now and have many more markets to choose from that will do it because they are trying to figure out ways to get new business,” she says. “I haven’t had one issue getting capacity.”
This statment may be from a State Farm agent. I thought I heard that they have a lot of vacant or primarily vacant lessors risk accounts on the books and find ways to insure both vacant sing fam homes held for flip/sale and lessors risk’s as new buisiness???
Twenty years ago, the standard rate on vacant property was $.50 per month ($6.00 annual) for fire and extended coverage only.
I had binding contracts with Lloyds and British companies with only $900,000 in capacity.
I dropped the rate to $.15 per month, and one year I wrote $1,400,000 in premium with less than a 5% loss ratio, including LAE .
I tried to get a major stock company to write a $20,000,000 limit, $100,000 deductible, on a 15 story, fire resistive, fully sprinklered, vacant office building with a 24 hour guard at the front desk, and they wouldn’t take it because “they don’t write vacant property.”
It’s about time the insurance industry realized the profit bonanza that exists in well-underwritten, properly priced vacant property.
Not only do many policies have limitations on vacant buildings, but there is a body of case law and some insurers share the premise that, if you no longer reside in your home, you have NO coverage on the dwelling and structures.
The Big I has done extensive research on this and published a white paper that gives over a dozen situations where someone may lose their home cause they’ve moved out with no intent to return. The paper cites court cases and recent actual claims where six-figure losses have been denied.
“We are seeing a lot more of this class now and have many more markets to choose from that will do it because they are trying to figure out ways to get new business,” she says. “I haven’t had one issue getting capacity.”
This statment may be from a State Farm agent. I thought I heard that they have a lot of vacant or primarily vacant lessors risk accounts on the books and find ways to insure both vacant sing fam homes held for flip/sale and lessors risk’s as new buisiness???
Twenty years ago, the standard rate on vacant property was $.50 per month ($6.00 annual) for fire and extended coverage only.
I had binding contracts with Lloyds and British companies with only $900,000 in capacity.
I dropped the rate to $.15 per month, and one year I wrote $1,400,000 in premium with less than a 5% loss ratio, including LAE .
I tried to get a major stock company to write a $20,000,000 limit, $100,000 deductible, on a 15 story, fire resistive, fully sprinklered, vacant office building with a 24 hour guard at the front desk, and they wouldn’t take it because “they don’t write vacant property.”
It’s about time the insurance industry realized the profit bonanza that exists in well-underwritten, properly priced vacant property.
Not only do many policies have limitations on vacant buildings, but there is a body of case law and some insurers share the premise that, if you no longer reside in your home, you have NO coverage on the dwelling and structures.
The Big I has done extensive research on this and published a white paper that gives over a dozen situations where someone may lose their home cause they’ve moved out with no intent to return. The paper cites court cases and recent actual claims where six-figure losses have been denied.
The paper can be accessed here:
http://www.iiaba.net/VU/NonMember/WhereYouReside.htm
Every agent and insurance regulator in the country should read this.