A couple of weeks ago, I received a letter from my insurance company regarding one of my rental properties. The letter stated that the insurer could no longer provide coverage for the property due to the reason “No primary residence insured on three same policy.” This statement left me confused about the connection between my rental property and my primary residence. Allow me to provide some background information:
1. Purchase Date: I bought the rental property in 2017.
2. Previous Insurance: I obtained an insurance policy for the property through a different insurance broker.
3. No Claims: I have never filed any insurance claims for this property.
4. Timely Premium Payments: I have consistently paid the insurance premium on time.
To gain clarity on this matter, I had a conversation with Larry Hoover, a property and casualty insurance broker. Larry, who is not the original broker who arranged my policy, shed light on the meaning of the mentioned statement. In this video, Larry will explain the significance of the line and provide a clear understanding of how my rental property is related to my primary residence.
It appears that my insurance company’s reasoning for no longer insuring my rental property was because my primary residence was not insured under their company. They stated that if I switched my primary residence insurance to their company, they would then insure my rental property. This requirement seemed unreasonable to me, as I only have one primary residence but could potentially own multiple rental properties. It would make more sense for the insurance company to encourage me to insure all my rental properties with them rather than forcing me to change my primary residence insurance.
In the end, I had to switch insurance companies for my rental properties to ensure they remained adequately insured. If you are an executive from the insurance company reading this blog, I urge you to consider the implications of such a requirement on residential investors. Instead of focusing on gaining one more primary residence policy, it would be more beneficial for your insurance company to offer incentives and perks to investors who choose to insure all their rental properties with your company. This approach could attract more business and establish stronger relationships with investors in the long run. Rather than forcing the investors to ditch your company.
This is the letter that I received