Island Property Insurance

[CanisLupusArctos]

If your insurance requires you to monitor/alert for sub-freezing temps or water, try the products made by Sensatronics in Bow, N.H. (www.sensatronics.com)

They make monitors for IT (computer) server rooms that can monitor temp/humidity, wetness, open doors, etc. The monitors have built-in mini-computers with their own IP addresses so all you have to do is plug them into an internet outlet (or router) and you can start your remote monitoring. I believe they can also email you or send a text message to alert you of various conditions.

There are also a number of temperature monitoring devices that can send remote alerts on www.ambientweather.com.

To defend against power outages you can use a surge protector with battery backup (available at Staples and similar stores.) They'll run a computer & monitor for 30 minutes or so (their intended purpose, so you have time to save your work and shut down), but if you only use the battery for modem/router and temp monitoring device it lasts a lot longer, especially if you have a top-of-the-line battery backup.

I do recommend testing the whole system when you're present, just to see exactly how long the battery will last. It can vary.

[Flylady]

Congradulations! I also use Avery and have my policies through Phonix. No problem with them at all, but of course the true test is if you have a claim, which I haven't (TG). I found renewals to be fairly simple, as they send a local rep out to inspect the cottage each fall. Guess they just want to see that property and cottage are maintained without hazards as I've never been there when they visit. This is the second season at my place and I can attest the excitement and anticipation of each trip to the lake has not faded at all!

[Rattlesnake Guy]

I can tell you that power outages on the Island during the summer last a lot longer than they do on the mainland for obvious reasons. When the power goes out we usually plan for 24 hours. We keep an ice cube on a shelf in the freezer to tell if we lost power while we were gone.

I can only imagine that in the winter it gets a lot worse, especially if no one is present to report it. It must be very difficult if a tree goes down on the lines and there are no roads, no trucks and no real emergency.

I think if I wanted to spend significant time on the island in the off season, I would get a generator.

[B&D]

If the towns actually covered the islands (thinking about Alton & Rattlesnake Island), then the insurance companies would cover us,.....but, the towns hit us up for property tax,claiming that we have fire and police coverage, but provide zip.

[AC2717]

Originally Posted by B&D

If the towns actually covered the islands (thinking about Alton & Rattlesnake Island), then the insurance companies would cover us,.....but, the towns hit us up for property tax,claiming that we have fire and police coverage, but provide zip.

Agree but do not the insurance company can choose not to write island property even if there were coverage but I agree on the taxes.
What infastructure is the city providing you on the island, yes I can see tax the land you park on on the mainland, but on the island what d they provide you with? If you have electricity you're paying the electrical company and there are taxes on that so what else can you give me?

[Webbsatwinni]

We are back to square 1, the insurance quote was for their estimate of 100% replacement cost, the mortgage company has a higher number in mind based on the appraisal.

The search continues, we are looking for an insurance carrier to match the mort gage lender's number or get the lender to agree to the current insurance number.

With the closing approaching fast, the anticipation is building.

Again, thanks to everyone for their great advice!!!!!!!!!!!!!!!!!!!

[AC2717]

Originally Posted by Webbsatwinni

We are back to square 1, the insurance quote was for their estimate of 100% replacement cost, the mortgage company has a higher number in mind based on the appraisal.

The search continues, we are looking for an insurance carrier to match the mortgage lender's number or get the lender to agree to the current insurance number.

With the closing approaching fast, the anticipation is building.

Again, thanks to everyone for their great advice!!!!!!!!!!!!!!!!!!!

Mortgage Companies cannot, I repeat, cannot press upon the buyer of the loan, nor the insurance, that the insurance must be for the value of the loan. It is law and in every state I know where to find it in MA and RI online but not in NH. As long as you have proper insurance for the bldg then they have to accept it. Insurance is for cost to rebuild and or replace, not for market value replacement.

In the event of a loss the mortgage company will be made whole again by a rebuilding of the property, their investment is protected by the insurance policy. every Mortgage company tries to do this because they feel that if they can bully their position in, they are better protected, just another case of mortgage people not knowing insurance policies and how insurance acts. I deal with this every single day Monday through Friday (in the industry).
Case in Point. I purchased my place for well over $100,000, it is a 400sqft building with no foundation. Max to replace this bldg to the same footprint, because i am in an assoc, would be 40k to $60 depending on types of materials and contractors. I placed $100k on the bldg because NH is a policy value state and in the event of a total loss I would receive $100k to do with as I please. The mortgage company tried to say something, cited the rule, did not even have to find it (which I would have if need and and would have been able to tell you where to find it. and they immediately backed off. The insurance company is not going to insure a bldg barley worth $20k as it stands now just because the market demands that it is worth $150k, the mortgage companies know this they just try to get the loan completely covered.

[GWC...]

Are we at the Lake or the Ocean?

It's beginning to smell like low tide...

[Webbsatwinni]

AC,

The appraisal for replacement cost came in at $192,000 and the best insurance we can get is $160,000. To go to $200,000 would bring my policy to an annual cost of $3,000 if we can get it at all.

The $160,000 comes at a reasonable rate but 3k annual is way too high for me to swallow. I don't know what this says for the future of island living (or should I say selling the property) as this should only get worse and not better. As the insurance gets harder to get and the cost to rebuild goes up, what we are being told is that even if we get it, one claim may be justification to be dropped.

I hate being so negative, but we thought island properties were a more affordable way to get on the lake earlier than we planned. It still may be and we have not thrown in the towel yet, I just would have never imagined that this would be the one item that stopped us.

The other interesting fact is that even if the mortgage was $10,000, the lender would require 100% replacement insurance based on the appraisal number to rebuild.

Wish me luck, I am going in for another round of insurance agent calls tomorrow, I will send updates as I get them. As always, thanks to the forum for the information and being a place to vent.

[Rattlesnake Guy]

Sounds like the lender is the problem for requiring you to have more insurance than you need. An island lot is usually worth least half of the property value. Hang in there, trust me that it will be worth the hassle when you get done.

We have used
Paul Turner
Liberty Insurance
Farmington NH 03835
603-755-3511

They used Phoenix Mutual

Some numbers if it helps.
We have a $1000 deductible
Dwelling $150K
Other Structures $15K
Personal Property $75K
Loss of use 30K

Personal Liability $500K
Medical $5K each

Annual premium under $500 bucks.

I never tried to get 100% of the retail value and my lender did not ask for it.

One step at a time. You can do it.

[Webbsatwinni]

Thanks RG

The issue seems to be that the appraiser feels that it would take more than 1/2 of the appraised value to rebuild. We have gone back to her, but they will not adjust it.
We are hanging in and it will be worth it!

[Lakegeezer]

Its amazing how much it costs to rebuild these days. It is unlikely you can build on an island for less than $150 per square foot, and it could easily be much more. $200K for replacement means a maximum of 1300 sqare feet. What size are you looking to insure? Just a thought, but can you take out a home equity loan on your primary house to pay for the island home, then reduce the coverage? Risky, but more affordable.

[codeman671]

That sounds ridiculous. We pay $750 a year on ours and have an estimated replacement cost of $330k, and that is on a log home which is usually more expensive than stick built.

We did find that a few insurers wanted to put enough coverage on it to cover the land value as well, rather silly being that even if the house burns down the land still remains. Our bank certainly did not require this.

[AC2717]

Originally Posted by codeman671

That sounds ridiculous. We pay $750 a year on ours and have an estimated replacement cost of $330k, and that is on a log home which is usually more expensive than stick built.

We did find that a few insurers wanted to put enough coverage on it to cover the land value as well, rather silly being that even if the house burns down the land still remains. Our bank certainly did not require this.

On to of this the land is not even covered in the replacement, it is just covered for liability

[Island Dweller]

Obtaining Island insurance is definitely one of the more aggravating ordeals but don't let it take away from your enjoyment of your new vacation home. Did you find that companies wouldn't give you insurance because of the fact it was on an island, or because of your heating source? Again, I recommend giving Allstate a call. I already had boat & snow mobile insurance through them and I even changed my primary NH residence to Allstate because of the money savings. As I mentioned earlier, just adding a few heat strips in the home (it's a log home) qualified me for their homeowners insurance with a huge savings over what I was paying through Avery, so it was a no-brainer. I do remember being told that there was something new in NH insurance policies where as the company had to pay replacement value no matter what the total cost is, and now there are specific dollar amounts on the policies.(as of October 2007).

[Webbsatwinni]

Island Dweller

You are correct, if we did this in September, there would have been no issue. If the mortgage we are going for is less than the house only replacement number the appraiser puts on it, you still need the 100% replacement number.

There was a large insurance company that said no, but when I told the mortgage broker that if we could not find the insurance, we were done and not moving ahead. He made some calls to friends and that company called me and they are back at the table.

Still trying and can't wait to get this behind us.

Thanks to all!

[oliviernh]

When we were building on Rattlesnake in 2005 we couldn't find anyone to insure the property...including Avery. Finally I connected with Codeman and he set me up with Mike Bertelone at Farm Family Insurance. Once I talked to him it was NO PROBLEM...For around $600 per year!!! Call Mike at 223-6686 and you won't have a problem.

[Blue Thunder]

Originally Posted by oliviernh

Call Mike at 223-6686 and you won't have a problem.

Farm Family is the way to go. Call Mike.

BT

[NightWing]

Insuring a home for full loan value is crazy. Even if your home burns to the ground, you still have the lot, the foundation, basement, (if you have one) septic system, fresh water source. The home itself is only required to be insured to 80% of rebuilding costs. If you insure for less, they may not pay off in case of a loss.

[Rattlesnake Guy]

You can see why the insurance company would not want to make your place more valuable burnt to the ground than standing by over insuring.

Reminds me of when my employer wanted to insure key employees for the companies benefit. I declined over fear it would make it harder for me to get insurance as I would be considered over insured.

[AC2717]

Hi,
Have to be careful on this one here. The appraisers are sent out by the lenders and work for them essentially. It is a way to justify the amount of the loan. In most cases these numbers can be inflated. A lot of times it works in your favor when obtaining a equity loan or a 2nd mortgage, but when it is for a purchase it can hurt you. This is one of the major reason for the fall in the real estate market over inflation of appraisal values in order to obtain homes for buyers that have an over inflated price tag. A multitude of appraisal companies nationwide are being investigated by the Fed Gov. as a result. (this is the stuff you do not hear about on the new just that the market is terrible).

As people have reccommed here I would shop around maybe both insurance agents and a new lender, but it is clear to me the lender is the problem as their appraised amount is not a required limit of insurance needed in order to obtain the mortgage, as long as the bldg is properly insured then it is legal. There has got to be a special market for island homes in this area, there are to many in this area to not be. Best bet contact the real estate agent they have to know of a market, the insurance agent, if they do not have a special market, will not really tell you of one because they might want to gain your business and keep it in their agency. Not all are this way though and do not want to be blamed for stereo typing here.

Problem here insurance RC is more in tune, not saying correct, with rebuilding costs and the construction industry as they deal with it on a daily basis with losses. The lender is more in tune, again not saying correct, with the real estate market and buying and selling properties not rebuilding them or building them. That is why they hire appraisers.

If you want, and I am sure the forum might be getting sick of my long Windiness Private message me and we can chat more. I wish I could help you out with a insurance carrier but my knowledge does not reach past MA and some main-land NH areas.