Has anyone used Obie Insurance?
Hello fellow investors,
I am currently using Farmers and Foremost Insurance. However I ran a few quotes on Obie Insurance (geared specifically towards landlords) and for only the 4 houses I checked, I am saving 1,5k a year if I switch. The only difference on paper is that the deductible for hail and winter storms is 5k instead of the 2,5k that I have with Farmers. Has someone used them and what's your experience so far?
Quote from @Rachel H.:
@Nina Erlandson Personally, I have not heard of Obie Insurance. I use Foremost for my mobile home investing business with the properties I buy and hold. Will be interesting to hear what others have to say here. Always good to know of other companies who provide products and services!
I just signed on with one of my rental properties. So far the quoting and signing on process is fast and easy. The price appears competitive, and the interface seems like it might work well with adding in multiple future properties. I'm normally skeptical of insurances I've never heard of or from out of state, but it's been a lot harder finding good landlord's insurance in CA this year. Especially one that hasn't drastically raised the yearly premium. I'm dipping my toes in and if all goes well I look forward to signing more properties over next year.
Tried getting quoted from OBIE last week and this is the response I received for some some properties in Central Florida:
" Hello,
Thank you for requesting a quote with us.
I apologize currently we do not have any carriers available for your properties in Florida. I would recommend checking with some local insurance brokers in your area, they may know more carriers that are available."
They seem to be electronic brokers that will shop for insurance in a pool of carriers. Not sure how they can get better prices than you doing the same shopping.
Quote from @Javier Marchena:
Tried getting quoted from OBIE last week and this is the response I received for some some properties in Central Florida:
" Hello,
Thank you for requesting a quote with us.
I apologize currently we do not have any carriers available for your properties in Florida. I would recommend checking with some local insurance brokers in your area, they may know more carriers that are available."
They seem to be electronic brokers that will shop for insurance in a pool of carriers. Not sure how they can get better prices than you doing the same shopping.
Hey @Javier Marchena, thanks for posting! While we have our own programs and products (and even have a FL office in the Sarasota area), we're unfortunately out of capacity in FL by this time in the year. And, given where the broader FL carrier market is at, you're right that it's probably easier for you to shop around to find coverage than for us to do the same on your behalf and potentially come up short. I'd rather the team set the right expectations for you up front than act like an agent that can get it done for you but then struggles with how challenging things are right now -- especially with it being hurricane season.
Hope that's helpful and I'm sorry we couldn't do more. If you have any properties in any other state, we're open for business!
Quote from @Aaron Letzeiser:
Quote from @Dave Rav:
@Aaron Letzeiser thank you for posting on here! We all appreciate your input on the ins/outs of Obie. Undoubtedly, your involvement has lead to increased business funneling to Obie...
Two questions:
Does Obie insure free-standing mobile homes (without land)?
Does Obie insure property in the name of an LLC?
Thanks!
@Dave Rav great questions:
1. We can, but depends on the state and certain characteristics. The mobile home insurance market is unfortunately becoming more challenging for insurance companies year after year it seems.
2. Yes, absolutely. A majority of real estate investment properties are held in an LLC. I never understood why companies would build a landlord insurance product and then decline for an LLC. We support multiple insured types.
Quote from @Aaron Letzeiser:Quote from @Dave Rav:@Aaron Letzeiser thank you for posting on here! We all appreciate your input on the ins/outs of Obie. Undoubtedly, your involvement has lead to increased business funneling to Obie...
Two questions:
Does Obie insure free-standing mobile homes (without land)?
Does Obie insure property in the name of an LLC?
Thanks!
@Dave Rav great questions:
1. We can, but depends on the state and certain characteristics. The mobile home insurance market is unfortunately becoming more challenging for insurance companies year after year it seems.
2. Yes, absolutely. A majority of real estate investment properties are held in an LLC. I never understood why companies would build a landlord insurance product and then decline for an LLC. We support multiple insured types.
Good prices and nice coverage, easy process and everyone I talked to there was pleasant and helpful. Surplus line is what I have been looking for as I am involved with an older property that is typically found to be uninsurable by a lot of other mainstream insurance companies due to the properties age and some of its original features and surroundings, I just have a question and have done some reading on this and it's really not too clear and it sounds it can go either way really with this and I'm fairly new to all this so I am learning a lot of things as I go but should the private non traditional mortgage lender be listed as additional insured while the person occupying & buying the home and also purchasing the property from the lender be listed as mortgagee? The lender does not live in the home and the agreement states that they be listed as loss payee. Was thinking the buyer and person living in the home who purchased the policy should be listed as insured with the lender listed as mortgagee? Should the term used on the policy be changed from mortgagee to loss payee? Or does that really go without saying since the loss payee information is the same person with the same information as the mortgage lender? Which brings me to another question; the agreement states that the homebuyer/occupant will retain home owners insurance on the property and list the lender as loss payee or first lien holder on the insurance for the life of the loan and yes I know it's in the agreement that was signed but I am wondering if by law it's even required once it used to be 20% but now it's 10% of the loan has been paid off, even big traditional mortgage lenders will remove PMI costs after 10% has been paid off. This lender might be up to some potentially shady dealing, I'm just wondering whether the lender is within legal limits to ask such a thing at this point, sure homeowners insurance is nice for everyone involved but I'm wondering if it is actually required or within legal limits for the lender to even be asking/trying to make an issue of it anymore when the house is valued at $65k, the loan was for $41k, only $16k is owed to the lender. The lender only put up $25k to purchase the house from the bank. He's got his money back already and the remaining amount due to him is only profits. Saying things like "breach of contact", always an unpleasant interaction with him for about the past 6 months, him fishing/hoping about if there are money troubles. No money troubles but I did lose my whole family earlier this year and dealing with some health issues as well so I don't really appreciate his extra unnecessary unwarranted crap everytime I have to deal with him and really im just trying to save my home, it's all I have left. I am currently waiting on a rather large legal settlement to hopefully hurry up and get him his $16,000 or if we can find someone to go ahead and pay him off early (no prepayment penalty), which would be hopefully paid off sooner than later as well in exchange for a secured lien on the property plus repayment of the $16,000 plus interest short term. Looking for another loan shark to replace the one I've got. Faced with the same problem I had to begin with, credit scores aren't great and don't have a qualifying cosigner for any type of traditional loan, mortgage or any type of equity refinance or HELOC, right now at this moment. Working on the scores but it has been difficult and things are slow going for sure. Although the property is worth way more than the loan we are needing and the secured collateral lien is really a sure safe bet and some easy money for someone willing to take the chance that isn't in it for anything other than to flip their money for profit/wanting to add to their portfolio, this would be an good opportunity for someone just starting out in real estate investment even. The banks still want a good or excellent score even with too much collateral, it's a shame, things everywhere don't seem to be looking up anytime soon for most Americans. We are not trying to have to borrow more than we need or have to sign up for 30 years or anything more than 3-5 years really. Plain and simple. Currently paying $575 per month, 28 payments left. I am in Arkansas.
hanks so Much
I reached out to Obie for a quote and this is the response I received via email:
"We’ve heard back from all our markets and unfortunately, we do not have a market available for your property at this time. If that changes, we will let you know. We appreciate you giving us the opportunity to review your property.
Best regards,"
I replied back asking for more specifics, wondering if it is the Milwaukee market, the Wisconsin market, the multi-family market, or the property itself, and I got crickets....
At the very least, I should get better customer service explaining why. Unresponsive customer service leads to not reaching out to Obie again in the future for other rental acquisitions. Has anyone else received this type of response from Obie?
Quote from @Dean Valadez:
I reached out to Obie for a quote and this is the response I received via email:
"We’ve heard back from all our markets and unfortunately, we do not have a market available for your property at this time. If that changes, we will let you know. We appreciate you giving us the opportunity to review your property.
Best regards,"I replied back asking for more specifics, wondering if it is the Milwaukee market, the Wisconsin market, the multi-family market, or the property itself, and I got crickets....
At the very least, I should get better customer service explaining why. Unresponsive customer service leads to not reaching out to Obie again in the future for other rental acquisitions. Has anyone else received this type of response from Obie?
Dean -- thanks for the feedback. Totally valid question and I'd be looking for a response if I were you as well. That would at least give you the context as well around what our reps mean by "markets".
I see that you sent in the question Wednesday evening this week so I'll check if that rep was our yesterday and will also have them follow up today.
As for your property, two main items that came up:
1. It's over 130 years old (1888). This isn't always a deal breaker, although many carriers tap out at 100 years old even with updates.
2. The replacement cost (cost to rebuild, not the value of the property) data providers are pegging the quadplex at close to $2M and most 1-4 unit rental property insurance programs tap out at $1-1.5M before you'd end up in a commercial insurance product. At the submitted square footage you provided, that $2M seems wildly out of whack. It doesn't happen often, but there are times when the data providers screw up a variable and suddenly they think your place is built with imported Italian marble and golden fixtures.
Nonetheless, I appreciate the feedback. I'm going to get with the sales rep and look into this further to see if there's any other option available or if we can make a referral to a local agent in your area that might be better positioned to assist.
-Aaron
OBIE's customer service is top-notch! When it comes to finding a good insurance agent, I think that a huge factor is responsiveness. Their team gets us quotes so quickly, and they are usually more affordable than what we are seeing from other agents. I really like that they specialize in landlord policies, too!
Thank you, Aaron. This is the type of response I was looking for - some sort of explanation as to why my property was being denied coverage.
I have received other quotes for insurance and they were able to go with a replacement cost closer to, but still above, the property value (thus, way under the $2M evaluation). I would truly appreciate another option if you have one or a local agent referral as you mentioned.
Please have someone reach out to me via email or phone
Quote from @Aaron Letzeiser:
Quote from @Dean Valadez:
I reached out to Obie for a quote and this is the response I received via email:
"We’ve heard back from all our markets and unfortunately, we do not have a market available for your property at this time. If that changes, we will let you know. We appreciate you giving us the opportunity to review your property.
Best regards,"I replied back asking for more specifics, wondering if it is the Milwaukee market, the Wisconsin market, the multi-family market, or the property itself, and I got crickets....
At the very least, I should get better customer service explaining why. Unresponsive customer service leads to not reaching out to Obie again in the future for other rental acquisitions. Has anyone else received this type of response from Obie?
Dean -- thanks for the feedback. Totally valid question and I'd be looking for a response if I were you as well. That would at least give you the context as well around what our reps mean by "markets".
I see that you sent in the question Wednesday evening this week so I'll check if that rep was our yesterday and will also have them follow up today.
As for your property, two main items that came up:
1. It's over 130 years old (1888). This isn't always a deal breaker, although many carriers tap out at 100 years old even with updates.
2. The replacement cost (cost to rebuild, not the value of the property) data providers are pegging the quadplex at close to $2M and most 1-4 unit rental property insurance programs tap out at $1-1.5M before you'd end up in a commercial insurance product. At the submitted square footage you provided, that $2M seems wildly out of whack. It doesn't happen often, but there are times when the data providers screw up a variable and suddenly they think your place is built with imported Italian marble and golden fixtures.
Nonetheless, I appreciate the feedback. I'm going to get with the sales rep and look into this further to see if there's any other option available or if we can make a referral to a local agent in your area that might be better positioned to assist.
-Aaron
I use Bob Dummer from PC Insurance for my Milwaukee properties.
Hi Aaron,
On the Obie Declarations Page of my landlord insurance policy (for my rental property in CA), there are 8 items (see below) under "IMPORTANT NOTICE". I'm not comfortable with them, especially for the first 4 items.
Would you kindly explain to me for each of them? Note: the insurer is Accelerant Specialty Insurance Company.
Thanks!
====================
1. The insurance policy that you have purchased is being issued by an insurer that is not licensed by the State of California. These companies are called “nonadmitted” or “surplus line” insurers.
2. The insurer is not subject to the financial solvency regulation and enforcement that apply to California licensed insurers.
3. The insurer does not participate in any of the insurance guarantee funds created by California law. Therefore, these funds will not pay your claims or protect your assets if the insurer becomes insolvent and is unable to make payments as promised.
4. The insurer should be licensed either as a foreign insurer in another state in the United States or as a non-United States (alien) insurer. You should ask questions of your insurance agent, broker, or “surplus line” broker or contact the California Department of Insurance at the toll-free number 1-800-927-4357 or internet website www.insurance.ca.gov. Ask whether or not the insurer is licensed as a foreign or non-United States (alien) insurer and for additional information about the insurer. You may also visit the NAIC’s internet website at www.naic.org. The NAIC—the National Association of Insurance Commissioners—is the regulatory support organization created and governed by the chief insurance regulators in the United States.
5. Foreign insurers should be licensed by a state in the United States and you may contact that state’s department of insurance to obtain more information about that insurer. You can find a link to each state from this NAIC internet website:
https://naic.org/state_web_map.htm.
6. For non-United States (alien) insurers, the insurer should be licensed by a country outside of the United States and should be on the NAIC’s International Insurers Department (IID) listing of approved nonadmitted non-United States insurers. Ask your agent, broker, or “surplus line” broker to obtain more information about that insurer.
7. California maintains a “List of Approved Surplus Line Insurers (LASLI).” Ask your agent or broker if the insurer is on that list, or view that list at the internet website of the California Department of Insurance: www.insurance.ca.gov/01-consumers/120-company/07-lasli/lasli.cfm.
8. ....
===================================
Quote from @Xian NA:
Hi Aaron,
On the Obie Declarations Page of my landlord insurance policy (for my rental property in CA), there are 8 items (see below) under "IMPORTANT NOTICE". I'm not comfortable with them, especially for the first 4 items.
Would you kindly explain to me for each of them? Note: the insurer is Accelerant Specialty Insurance Company.
Thanks!
====================
1. The insurance policy that you have purchased is being issued by an insurer that is not licensed by the State of California. These companies are called “nonadmitted” or “surplus line” insurers.
2. The insurer is not subject to the financial solvency regulation and enforcement that apply to California licensed insurers.
3. The insurer does not participate in any of the insurance guarantee funds created by California law. Therefore, these funds will not pay your claims or protect your assets if the insurer becomes insolvent and is unable to make payments as promised.
4. The insurer should be licensed either as a foreign insurer in another state in the United States or as a non-United States (alien) insurer. You should ask questions of your insurance agent, broker, or “surplus line” broker or contact the California Department of Insurance at the toll-free number 1-800-927-4357 or internet website www.insurance.ca.gov. Ask whether or not the insurer is licensed as a foreign or non-United States (alien) insurer and for additional information about the insurer. You may also visit the NAIC’s internet website at www.naic.org. The NAIC—the National Association of Insurance Commissioners—is the regulatory support organization created and governed by the chief insurance regulators in the United States.
5. Foreign insurers should be licensed by a state in the United States and you may contact that state’s department of insurance to obtain more information about that insurer. You can find a link to each state from this NAIC internet website:
https://naic.org/state_web_map.htm.
6. For non-United States (alien) insurers, the insurer should be licensed by a country outside of the United States and should be on the NAIC’s International Insurers Department (IID) listing of approved nonadmitted non-United States insurers. Ask your agent, broker, or “surplus line” broker to obtain more information about that insurer.
7. California maintains a “List of Approved Surplus Line Insurers (LASLI).” Ask your agent or broker if the insurer is on that list, or view that list at the internet website of the California Department of Insurance: www.insurance.ca.gov/01-consumers/120-company/07-lasli/lasli.cfm.
8. ....
===================================
Hey Xian!
I see you just joined and this is your first post -- welcome to BiggerPockets! I think you'll find a ton of useful content and a supportive community here!
Your question is a very common question, and I can appreciate your concern here. Each state has what's known as Admitted and Non-Admitted Carriers. While there are some nuances here, the basic premise is that an Admitted Carrier submits their forms and rates to the state for approval. If the state approves, then the state will back that policy in the event the carrier goes out of business. A Non-Admitted carrier does not submit to the state for approval. As a result, if that carrier goes under and is unable to pay claims, the state is not required to backstop the policy. The state also requires that companies list the language you posted on every policy document.
It's very important to note that just because a carrier is Non-Admitted, it does not mean it's any better or worse of an insurance company than an Admitted carrier. Some of the largest and most successful insurance companies in the world choose to only offer their products on a Non-Admitted basis. Lloyd's of London is one of those, for example.
For Non-Admitted carriers, the important item to then pay attention to is the AM Best rating (or equivalent rating agency). This rating will give you a sense of the carriers financial solvency. Typically, a rating of A- or better is a very strong company. The carrier rating for the policy you purchased is AM Best rated A-.
You are probably aware that many carriers are leaving the State of California due, in part, to the significant regulatory challenges they have with making adjustments to their products that the state always has to review and approve. These are all primarily Admitted carriers. Many, I would now assume, may eventually return to the state and offer Non-Admitted products.
If you have any other questions, please feel free to reach out to us!
Hi everyone, I also recently signed up with Obie earlier this year for several of our properties and found them incredibly easy to get quoted and a policy written. The sign-up experience is 10/10 compared to other antiquated sign up flows.
I wanted to know - if anyone has any experience filing claims with Obie and how that process has been for them?
Quote from @Aaron Letzeiser:
REVISED CODE
@Aaron Letzeiser
I was hoping to work with Obie, but on the last page before signing the documents, I came across this disclaimer, which made me rethink my decision.
"PART 2. SIGNED STATEMENT OF INSURED AS REQUIRED BY SECTION 3905.33 OF THE OHIO
REVISED CODE
The named insured ___________, acknowledges that the insurance policy (other than life insurance) as described above is to be placed with an insurance company not authorized to do business in Ohio.
The insured understands that the insurance company is not a member of the Ohio Insurance Guaranty Association and that Chapter 3955. of the Ohio Revised Code is not applicable to claimants or insureds of said insurance company. The surplus line broker shall collect the Ohio tax of five percent of the amount of the premium for the insurance policy at the time the insurance policy is delivered to the insured."
does anyone know what this means and how this is going to affect the potential claims? This is the only reason I am not going to consider going with Obie!
any explanation is greatly appreciated
Thank you
Quote from @Sahand Vafadary:
Quote from @Aaron Letzeiser:
REVISED CODE@Aaron Letzeiser
I was hoping to work with Obie, but on the last page before signing the documents, I came across this disclaimer, which made me rethink my decision.
"PART 2. SIGNED STATEMENT OF INSURED AS REQUIRED BY SECTION 3905.33 OF THE OHIO
REVISED CODE
The named insured ___________, acknowledges that the insurance policy (other than life insurance) as described above is to be placed with an insurance company not authorized to do business in Ohio.
The insured understands that the insurance company is not a member of the Ohio Insurance Guaranty Association and that Chapter 3955. of the Ohio Revised Code is not applicable to claimants or insureds of said insurance company. The surplus line broker shall collect the Ohio tax of five percent of the amount of the premium for the insurance policy at the time the insurance policy is delivered to the insured."
does anyone know what this means and how this is going to affect the potential claims? This is the only reason I am not going to consider going with Obie!
any explanation is greatly appreciated
Thank you
Hi @Sahand Vafadary! This is a great question and one that's similar to Xian's above from a few months ago. I also see you're newer to the BP community and this is your first post. Welcome! I think you'll find a ton of useful content and a supportive community here!
Your question is a very common question, and I can appreciate your concern here. Each state has what's known as Admitted and Non-Admitted Carriers. While there are some nuances here, the basic premise is that an Admitted Carrier submits their forms and rates to the state for approval. If the state approves, then the state will back that policy in the event the carrier goes out of business. A Non-Admitted carrier does not submit to the state for approval. As a result, if that carrier goes under and is unable to pay claims, the state is not required to backstop the policy. The state also requires that companies list the language you posted on every policy document.
It's very important to note that just because a carrier is Non-Admitted, it does not mean it's any better or worse of an insurance company than an Admitted carrier. Some of the largest and most successful insurance companies in the world choose to only offer their products on a Non-Admitted basis. Lloyd's of London is one of those, for example.
For Non-Admitted carriers, the important item to then pay attention to is the AM Best rating (or equivalent rating agency). This rating will give you a sense of the carriers financial solvency. Typically, a rating of A- or better is a very strong company. The carrier rating for Obie policies range from A+ to A-.
You are probably aware that many carriers are leaving the State of California due, in part, to the significant regulatory challenges they have with making adjustments to their products that the state always has to review and approve. State Farm recently announced they would cancel 70,000 policies because of these challenges. These are all primarily Admitted carriers. Many, I would now assume, may eventually return to the state and offer Non-Admitted products.
If you have any other questions, please feel free to reach out to us
Has anyone used Obie insurance for their rental properties in SoCal, and if so, what is your experience with them? Please share as I explore using them for my rentals. Thank you.
Quote from @Aaron Letzeiser:
Quote from @Sahand Vafadary:
Quote from @Aaron Letzeiser:
REVISED CODE@Aaron Letzeiser
I was hoping to work with Obie, but on the last page before signing the documents, I came across this disclaimer, which made me rethink my decision.
"PART 2. SIGNED STATEMENT OF INSURED AS REQUIRED BY SECTION 3905.33 OF THE OHIO
REVISED CODE
The named insured ___________, acknowledges that the insurance policy (other than life insurance) as described above is to be placed with an insurance company not authorized to do business in Ohio.
The insured understands that the insurance company is not a member of the Ohio Insurance Guaranty Association and that Chapter 3955. of the Ohio Revised Code is not applicable to claimants or insureds of said insurance company. The surplus line broker shall collect the Ohio tax of five percent of the amount of the premium for the insurance policy at the time the insurance policy is delivered to the insured."
does anyone know what this means and how this is going to affect the potential claims? This is the only reason I am not going to consider going with Obie!
any explanation is greatly appreciated
Thank youHi @Sahand Vafadary! This is a great question and one that's similar to Xian's above from a few months ago. I also see you're newer to the BP community and this is your first post. Welcome! I think you'll find a ton of useful content and a supportive community here!
Your question is a very common question, and I can appreciate your concern here. Each state has what's known as Admitted and Non-Admitted Carriers. While there are some nuances here, the basic premise is that an Admitted Carrier submits their forms and rates to the state for approval. If the state approves, then the state will back that policy in the event the carrier goes out of business. A Non-Admitted carrier does not submit to the state for approval. As a result, if that carrier goes under and is unable to pay claims, the state is not required to backstop the policy. The state also requires that companies list the language you posted on every policy document.
It's very important to note that just because a carrier is Non-Admitted, it does not mean it's any better or worse of an insurance company than an Admitted carrier. Some of the largest and most successful insurance companies in the world choose to only offer their products on a Non-Admitted basis. Lloyd's of London is one of those, for example.
For Non-Admitted carriers, the important item to then pay attention to is the AM Best rating (or equivalent rating agency). This rating will give you a sense of the carriers financial solvency. Typically, a rating of A- or better is a very strong company. The carrier rating for Obie policies range from A+ to A-.
You are probably aware that many carriers are leaving the State of California due, in part, to the significant regulatory challenges they have with making adjustments to their products that the state always has to review and approve. State Farm recently announced they would cancel 70,000 policies because of these challenges. These are all primarily Admitted carriers. Many, I would now assume, may eventually return to the state and offer Non-Admitted products.
If you have any other questions, please feel free to reach out to us
Thank you so much @Aaron Letzeiser
Your explanation makes sense
My only concern is still with regards to the terminology stating “Not authorized to do business in Ohio”. Is this the same as not being admitted? Or is it a situation that the company insuring the property has not obtained appropriate licenses to operate in Ohio, therefore I won’t be covered in case of a disaster?
Quote from @Sahand Vafadary:
Quote from @Aaron Letzeiser:
Quote from @Sahand Vafadary:
Quote from @Aaron Letzeiser:
REVISED CODE@Aaron Letzeiser
I was hoping to work with Obie, but on the last page before signing the documents, I came across this disclaimer, which made me rethink my decision.
"PART 2. SIGNED STATEMENT OF INSURED AS REQUIRED BY SECTION 3905.33 OF THE OHIO
REVISED CODE
The named insured ___________, acknowledges that the insurance policy (other than life insurance) as described above is to be placed with an insurance company not authorized to do business in Ohio.
The insured understands that the insurance company is not a member of the Ohio Insurance Guaranty Association and that Chapter 3955. of the Ohio Revised Code is not applicable to claimants or insureds of said insurance company. The surplus line broker shall collect the Ohio tax of five percent of the amount of the premium for the insurance policy at the time the insurance policy is delivered to the insured."
does anyone know what this means and how this is going to affect the potential claims? This is the only reason I am not going to consider going with Obie!
any explanation is greatly appreciated
Thank youHi @Sahand Vafadary! This is a great question and one that's similar to Xian's above from a few months ago. I also see you're newer to the BP community and this is your first post. Welcome! I think you'll find a ton of useful content and a supportive community here!
Your question is a very common question, and I can appreciate your concern here. Each state has what's known as Admitted and Non-Admitted Carriers. While there are some nuances here, the basic premise is that an Admitted Carrier submits their forms and rates to the state for approval. If the state approves, then the state will back that policy in the event the carrier goes out of business. A Non-Admitted carrier does not submit to the state for approval. As a result, if that carrier goes under and is unable to pay claims, the state is not required to backstop the policy. The state also requires that companies list the language you posted on every policy document.
It's very important to note that just because a carrier is Non-Admitted, it does not mean it's any better or worse of an insurance company than an Admitted carrier. Some of the largest and most successful insurance companies in the world choose to only offer their products on a Non-Admitted basis. Lloyd's of London is one of those, for example.
For Non-Admitted carriers, the important item to then pay attention to is the AM Best rating (or equivalent rating agency). This rating will give you a sense of the carriers financial solvency. Typically, a rating of A- or better is a very strong company. The carrier rating for Obie policies range from A+ to A-.
You are probably aware that many carriers are leaving the State of California due, in part, to the significant regulatory challenges they have with making adjustments to their products that the state always has to review and approve. State Farm recently announced they would cancel 70,000 policies because of these challenges. These are all primarily Admitted carriers. Many, I would now assume, may eventually return to the state and offer Non-Admitted products.
If you have any other questions, please feel free to reach out to us
Thank you so much @Aaron Letzeiser
Your explanation makes sense
My only concern is still with regards to the terminology stating “Not authorized to do business in Ohio”. Is this the same as not being admitted? Or is it a situation that the company insuring the property has not obtained appropriate licenses to operate in Ohio, therefore I won’t be covered in case of a disaster?
Great question, @Sahand Vafadary. It means the company is Non-Admitted in Ohio. However it still has all of the necessary licenses and approvals from the state to operate as an insurance company. A list of the companies that the state has approved is at this link, which includes our carriers: https://oh-di.my.site.com/community/s/surpluslinecompanies
Quote from @Todd Nguyen:
Has anyone used Obie insurance for their rental properties in SoCal, and if so, what is your experience with them? Please share as I explore using them for my rentals. Thank you.
@Todd Nguyen - while I'm biased, I think we have a solid product in California with good pricing and coverage, and it's still fairly available across the state (unlike the other carriers that are unfortunately leaving). If you have any questions or need help while going through the process, feel free to DM me.
I insured a residential property that we are renovating with Obie. They were quick and very reasonable compared to other carriers.
I'm coming up on policy renewal and, unfortunately, Obie no longer has a realationship with that carrier so I'll be curious to see what they bring to the table as other options.
Overall, nothing negative to say about them.