Rehab Insurance
Hi all. Any advice on type of insurance and/or recommended company to purchase hazzard insurance for "quick" (30 day) rehb of vacant property? 
Thanks for the help!
Hi all. Any advice on type of insurance and/or recommended company to purchase hazzard insurance for "quick" (30 day) rehb of vacant property?
Thanks for the help!
Hi there and welcome.
I am a fellow newbie.
I called my Insurance guy just yesterday and explaind that I was going into Rehabbing. His first question was if I was going to hire a GC or do it all myself. I told him I would get a GC and do very minimal myself.
He said that I should get just liability as the GC will have his own insurance. He went on to say that it was not cheap...I believe he quoted me 100.00/mo
I had heard about a coverage that was self managed. Meaning, as I bought and/or sold properties, I could add/remove them myself.
He said the only thing he knew like that was a blanket policy where I get coverage for a specific dollar amount. If I knew I would be doing 1mil in properties, I would purchase a 1mil policy. If I went under that amount for a year, I would get a refund...If I went over I would pay. He said this policy was more like a builders policy though. He recommended I not do it.
Just my 2 cents...hope others have some pennies to add
Hey, thanks for the reply. I was able to get one name (broker) from a broker. They have a program where you can get the hazzard insurance while the prop is vacant and convert to liability if you want to rent it.
I'm waiting for another name this afternoon and would be happy to provide them once I have them. Just email me if you'd like details. Thanks...
I have a local agent in town that writes cash value insurance. It covers me for the purchase price. That way if it burns down I am covered. It is very pricey.
Zurich provides Builder's Risk insurance that I use when the house will be vacant for more than 30 days. (I can use a standard insurance policy for less than 30 days vacancy.)
I had a LOT of trouble finding an agent that sells this type of policy.
**contact for his personal info, see my profile**
NOTE: I have no relationship with that organization except that I am a customer. I hope I'm not breaking any forum rules by posting this information here. My apologies in advance if I am.[ Edited by NC_Yank on Date 07/02/2003 ]
These other companies are cheaper than 100.00/mo ?
One thing to remember:
Anyone you hire to preform work shpuld have a certificate of insurance with YOU as the protected party. Its not enough to see and insurance binder, thats just general. His agent will do this for him and if he does not know what your talking about...he's not the guy you want. vacant dwelling policies are expensive, but so is all the equipment and rehab items going to the home.
Caution is warranted all the way around when dealing with GCs.
Getting copies of insurance policies is one thing, getting named as an additionally insured is another, and regualarly checking on the status of the insurance policies and payments to the subcontractors is a completely higher and necessary step.
These are lessons I learned the hard way:
My GC sent me a falsified worker's comp face sheet as his policy. I later learned that his licensed was revolked a day before he signed his ill-drafted contract with me for a sizeable job, and it was revolked because he didn't have adequate worker's comp insurance.
So the face sheet he sent me was fraudulent - but that's ok, he's gotten away with robbery a been reported to every authority possible, and it seems to be no big deal to anyone but me. There are no sanctions. His attorney didn't get paid, he hasn't answered any of the discovery documents issued by any of the original 9 plaintiffs on the case (I am only one of several of his vicitims), and he still is a free man, and hasn't paid a nickel to anyone.
Get this....he and his ever-changing and misfit crew showed up to my home when they felt like it...which is bad enough, but if they would have gotten hurt, I would have been liable because I went to get the building permit and registered it as owner/builder (which, of course, was the GC's idea.)
So a year later, the licensing board has issued a citation and an accusation against this joker's license, but the GC doesn't care cuz he let his renewal lapse.
The other thing is, you guessed it, I got stuck paying off 5 lien holders who didn't get paid by the GC, despite the fact that I paid the GC 80% of his contracted fee. (Thank goodness I got angry enough to stop paying him before he completely drained by budget.)
Now that the liens are paid off, I've been to court a dozen times, spent $5000 on attorney's fees before firing the attorney for doing "research" without results, issued my own discovery documents and learned the court procedure manual from front to back, and after I successfully collected on the bond, finally have the home refinanced at a much lower rate, and yes, I live in a beautiful place.
Lessons learned are plenty - but the first is that I will always check on the insurance policies of a contractor, whether a GC or a sub before signing a contract and during the time of job completion. Obviously, GCs can lose their expensive insurance policy coverage at any point.
While I'm at it, let me also tell you that I will never pay a GC for work done by a subcontractor without making the check payable to both the GC and the subcontractor.
Furthermore, I won't put trust in someone because the state licensing board website says someone's license is in force. Whatever a licensing board claims it can do, it probably won't do more than file papers that stop the GC from renewing his license - big whoop.
The GC is not required to pay the subcontractors, who get paid by putting liens on the property.
I also learned that if I hire a GC, which may be never again, but if I do, I certainly won't get the building permit as owner/builder - because that makes me directly responsible for everything, including liability if something goes wrong.
Enough about me and my mistakes... I hope some of you other folks will share your stories so we all can learn from them.
Thank you,
Marlene
Quote:
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On 2003-07-18 04:44, MarleneM wrote:
While I'm at it, let me also tell you that I will never pay a GC for work done by a subcontractor without making the check payable to both the GC and the subcontractor.
...I also learned that if I hire a GC, which may be never again, but if I do, I certainly won't get the building permit as owner/builder - because that makes me directly responsible for everything, including liability if something goes wrong.
Thanks for a lot of great hard-won wisdom and advice. Couple of questions:
1) How do you make a check payable to more than one person? How does the bank treat it?
2) What kind of building permit would you recommend getting?
I have noticed this vein in Marlene's posts.
There are a few things I might point out as a GC.
Did you pick the cheapest bid? and did you check his references before work started?
Second in many states it doesn't matter who pulls the permit, the owner is responsible to see that code is met and all the right things take place.
As a good GC with month's work in advance I wouldn't hassle with all the things you would want/require unless it was a job over60K and then I would factor in extra $$ for the hassle involved. In millions of dollars of rehab I have never been asked to put a homeowner on my policy.
Now I would require lien releases and save harmless to be signed by subs as checks were paid. (if the GC is any good he has his own crew and two subs only should really appear, plumber and electrician on all but the really big rehab projects).
The materials supplier can lien as well. You can make the check out to two parties and they will have to accompany each other to the bank etc.
You get what you pay for (and what you don't).
Ask around for a good contractor and when you find one ask him for others he would recommend. BIrds of a feather....
Remodel makes up 80% of construction in US and oly 20% of the contractors are tough enough and smart enough t go after it. Find one and hold on.. Most of our business is repeat...
Good luck on your project!
[addsig]
Quote:
On 2003-07-25 04:35, Stockpro99 wrote:
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Now I would require lien releases and save harmless to be signed by subs as checks were paid.
...
The materials supplier can lien as well. You can make the check out to two parties and they will have to accompany each other to the bank etc.
Thanks Stockpro. You're giving some inavluable advice to someone who is about to get his feet wet with rehab (me). What is "save harmless" though - some sort of legal waiver? Is it up to me as the owner to make sure these things get signed by subs and material suppliers?
Also, I plan to pay the GC in 1/3 increments as the job is done. So, when a certain milestone is hit, I give him 1/3 of the money, then when another milestone is hit, 1/3, and the final third at the end. Does this make sense to you as a GC, since I assume a good GC would get his materials on 30 day terms or whatever?
Does it make sense to have some kind of a formal project plan, mutually agreed upon, before the work starts, detailing the order in which stuff is to be done? This could then include the triggers for the release of funds. Seems like the more communication there is up front, the less likely it is there would be conflict later on.