Title: Navigating Landlord Insurance Options: Traditional vs. Surplus Lines Providers
Understanding Your Landlord Insurance Choices: What You Need to Know
As a property owner renting out a historic brownstone built in 1890, I’ve recently faced some complex insurance issues that may resonate with other landlords. My long-standing, family-owned insurance agency was acquired by a larger corporation, leading to a decline in customer service quality. Despite this, I’ve stuck with them because their rates have historically been unbeatable. However, recent developments have prompted me to reevaluate my options.
The Challenge of Non-Renewal and Market Changes
Recently, I received a non-renewal notice from my insurer, as they no longer cover landlord policies. This situation appears to be widespread, with numerous customers experiencing similar cancellations in local Facebook groups. My property is a legally recognized three-family home, updated throughout but originating from 1890—an older, brick structure that can pose challenges for insurance providers.
Traditional Insurance Options: Cost and Limitations
Currently, I pay approximately $2,500 annually through a conventional insurer. In searching for alternatives, I found that reputable companies like AAA quote premiums starting around $4,100, with other brokers offering rates up to $4,600 for similar coverage. These figures are significantly higher than my existing premium, raising questions about the best way to proceed.
Exploring Surplus Lines Insurance
In response to the non-renewal, one of my brokers suggested coverage through Lloyd’s of London, quoting $2,900—a surplus lines company. Another broker mentioned Lloyd’s National, with a quote of $3,700, also via a surplus provider. Surplus lines insurers are often used for high-risk properties or unique circumstances, but their role in landlord insurance can be somewhat complex.
Pros and Cons of Surplus Lines Providers
Surplus insurers typically operate outside standard state regulations, which can lead to different claims processes and legal frameworks. While this might raise concerns about claim handling and coverage protections, some landlords find that surplus policies offer competitive rates and tailored coverage options. In my case, the surplus quotes are comparable or even lower than traditional carriers, which is encouraging.
Current Concerns and Considerations
My current broker was unhelpful beyond providing generic online answers, highlighting a broader issue of knowledge gaps in the industry. Despite the price advantages of some surplus options, I am cautious about ensuring that my coverage remains reliable and aligned with legal standards.
Key Takeaways for Land
