Homeowners Ins for a Garage/apartment

Discussion in 'P&C Insurance Forum' started by pfg1, Jul 26, 2017.

  1. pfg1
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    pfg1 Well-Known Member

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    How can someone obtain a policy for a large steel building on acreage, that has an apartment built on the back of it?

    It has no separate mailing address.... property is in land use (agriculture). Client lives on adjacent parcel of land owned by a family member, with mailing address.

    What carriers would do this? Suggestions? Thanks for any advice.

    Note: I don't do p&c, so I have no clue.
     
  2. adjusterjack
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    adjusterjack Well-Known Member

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    Any P&C insurance company could do it.

    Let's start with this:

    Client should probably have an HO-4 (renters policy) covering his personal property and personal liability.

    There is an endorsement called "Additional Residence Premises Rented to Others" which could be added to the renters policy and be a solution to the liability issue as long as the garage and apartment are the only occupancies of the other property.

    That leaves getting a separate policy on the garage/apartment building for Fire and Extended Coverage.

    However, you mentioned that the land use of that property is agricultural.

    A better alternative might be a Farm & Ranch policy covering all the liability and property exposures for the client but he may still need a renters policy where he lives.

    Since you don't do P&C, have your client consult an independent agent who does both personal and commercial lines. This would be easy peasey for an experienced P&C agent.
     
  3. pfg1
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    pfg1 Well-Known Member

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    Thanks.

    He is currently living with a family member, but will soon be occupying the apartment full time as primary res. Its currently under construction, almost finished.

    The agricultural land use is mainly a tax play, but 100% legal due to a small orchard he planted. He doesn't need any insurance on that.

    He is working through an experienced agent that does all lines. I'm just trying to get additional info to make sure he is getting the best policy he can. I know and respect the agent. The initial word he's getting is that it can be done but has to go non-traditional - ie: expensive.

    When he was building the garage a while back, his construction loan through farm credit had insurance on it. Once it was finished, they wanted an astronomical amount to cover the building with insurance.... although its only concrete and steel. It couldn't burn down if you tried to. And at that time he had basically nothing in it - so it was just the building they were quoting. The apartment is stick built, with metal siding, roofing, etc. Basically a house built onto the back of the building.

    Is there a trad company that would be best in this situation? Or is one not so good at this type of deal?

    Thx
     
  4. adjusterjack
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    adjusterjack Well-Known Member

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    Does he own the land on which the garage/apt is built?

    And you say he is going to live in the apartment?

    And do what with the garage building?

    And there is no actual farming being done on the property?

    What's the square footage of the apartment and of the garage?

    Post of photo if you can.
     
    Last edited: Jul 26, 2017
  5. pfg1
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    pfg1 Well-Known Member

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    It will be his primary residence. He owns the land, clear I think. Pretty sure he still owes a small amount on his garage. It could be the other way around, owes on land...building is clear. Either way, he said it will all be paid off by the end of the year if things go as planned. He doesn't owe much. Cost about $80k to build the building.

    No real farming on property. He planted the orchard for the land use tax deal, and maintains that... and was able to build his building under the same.

    Apartment is all paid for out of pocket as he's built it. Prob another $75-80k. The garage just has his stuff/junk in it. A few pieces of heavy equipment (bobcat, backhoe), mowers, atv's, alot of tools, a couple project old trucks, a harley, etc. Its just a garage, but it is 40x100.

    The apartment is about 1100-1200 sq ft I think, built along the back of the building. Build on a slab. I think its about 45x25 or thereabouts. Envision a lean-to open air type equipment shed that was closed in and finished off to make a nice living space. Value will definitely be $100k-$120k when finished, imo.

    I don't have pictures... but its a huge rectangle heavy duty steel building, with big bay doors on the ends, and 2 walk in doors. No windows. Has heavy duty hurricane and snow rating.
     
  6. adjusterjack
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    adjusterjack Well-Known Member

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    My kind of place. I'm a car collector. I'd be in hog heaven.

    Anyway, back to the insurance.

    The combination is not likely to conform to any standard or preferred homeowners underwriting criteria. P&C agents are often judged by their appointed carriers by the quality and type of risks they place which often means that they put something like this is a non-standard company without even asking the preferred carriers.

    Might fit a Farm and Ranch program at a reasonable price if he continues to maintain the orchard.

    One thing you might suggest to him is to go online and obtain quotes directly from insurance companies, approaching it from the standpoint of small house with large attached garage. He can google online homeowners quotes, answer all questions truthfully, and upload a photo if necessary. Must be dozens of companies that quote online. Wouldn't hurt to try as many as he can find. Might find a reasonable deal.
     
  7. pfg1
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    pfg1 Well-Known Member

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    Thanks for the info. I appreciate it!

    ----------

    Any additional input from others would be appreciated.

    Also, this is located in Virginia. If anyone here is in VA and wants to give me input or can run a quote, please let me know. Thanks!
     
  8. Herkster
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    Herkster Well-Known Member

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    So, is it similar to a Morton Building House? If it is, which is just a steel building that looks like a machine shed that includes living area and an attached garage, insure it like a house. He owns it, right? It's really not an apartment then, it's a house, a primary residence, insure it as such.

    We just insured one of these, wrote it on as an HO5. Seemed simple
     
  9. pfg1
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    pfg1 Well-Known Member

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    Well sorta, kinda. Its a big ol building, that he added a living space onto the back of it by closing in a machine shed area. I think the problem he's running into is the "apartment" is so much smaller than the garage section.

    Agent is working on something for him.
     
  10. Herkster
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    Herkster Well-Known Member

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    I'm still confused why you are referring to it as an apartment, after telling us it's going to be his primary residence. If the shed looked like a house, and had 2k sq ft of garage, and 800 sq ft of living space, wouldn't you still write it as an H05? I certainly would.
     
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