Need Advice/suggestions: Home Owners Policy

[adamsagency]

Here's the deal. A client of mine is planning to move her house into an company name. She's already done the paperwork with a commercial mortgage and will close in days (supposedly). She asked me to contact the insurance company today and ask if they can switch from her name to her company. They flat out denied doing so and stated they will cancel the policy if the homeowner moves forward with the change in ownership for the home.

Any suggestions on what to do? Should I just write a commercial policy for her? I've never had an issue like this, and it's a problem. The house is in Westchester NY (Scarsdale) and has been ongoing construction upgrades. It's a tough house to place. Plus, she doesn't want to pay more than a few grand for insurance. So, I am perplexed.

I know, many would say just let her go. However, her parents are big into real estate, and I also write all their real estate too. I would guess to imagine, if I do not place her somewhere, I will lose the parents as well.

 

[xrac]

Sounds like you will have to go commercial. Why is she changing the ownership titling?

 

[adamsagency]

She will not tell me. Says that's what she wants..

 

[BigIVU]

If the company is a separate entity like a corporation, SHE technically may not own the property anymore and, as a result, may no longer have an insurable interest and might night be able to recover for a loss. Many insurers will not issue a homeowners policy on a corporately owned home. Some insurers may issue a dwelling policy. Otherwise you're probably looking at a commercial package like a BOP.

 

[marindependent]

Moving the ownership of your home from individual's names to a corporate name is often a terrific way to quadruple your annual premiums. Sometimes far more.

Depending on the type of the incorporation (Single Member LLC vs Class B Corporation) can be a distinction as well.

I have found that many of the carriers can treat this differently. Its always useful to speak with an experienced agent or MGA in these situations.

 

[adjusterjack]

She will not tell me. Says that's what she wants..

Why she is doing it she can keep to herself. But she will have to tell what the building will be used for once it's in the corporate name so the insurance can be underwritten.

Possibilities:

Day care.
Animal rescue.
Drop shipping.
Meth Lab.
Ammunition sales.
Firearms dealer.
Medical marijuana.
Moving and storage.
Church.
Furniture manufacture.
Bakery.
Vitamin supplements.
Contractor's office.
Auto repair.

I'm out of steam. Anybody else want to add to the list?

 

[fed up]

A 5 year old thread, hope they figured it out. Sounds like someone convinced this person to do so for tax purposes, business owns home and can use the deduction, without figuring the repercussions. There are many financial advisors suggesting crazy stuff out there.

 

[adjusterjack]

A 5 year old thread,

Darn, missed it again.

 

[marindependent]

A are many financial advisors suggesting crazy stuff out there.

Agreed and/but if they understood that many insureds that do this might be forced to move from an Admitted HO3 policy for $800 vs a Commercial Form Non-Admitted policy with more limited coverage for $2,000 than they might just not suggest it.

 

[fed up]

Agreed and/but if they understood that many insureds that do this might be forced to move from an Admitted HO3 policy for $800 vs a Commercial Form Non-Admitted policy with more limited coverage for $2,000 than they might just not suggest it.

Too many FP's are in it for their money. There is a noted person on TV who makes all kinds of crazy suggestions. I had a customer very upset with me about why I did not sell them a flood policy because their FP told everyone in the room to get one. She lived at the top of a hill a mile from the closest water source. I've heard some pretty confusing stuff over the years and many are terrific people. The rest get some wild ideas