U.S. Property Insurance for Overseas Owners

Hi everybody, this is Robert Chadwick with America Mortgages. Thank you for joining us for another webinar. Today we're happy to have Lucas Ramos from Steadily Insurance. Steadily is one of our vetted insurance partners — in fact, our only vetted insurance partner — and they help provide insurance for our foreign national and U.S. expat mortgage clients. Lucas, perhaps you could introduce yourself and what Steadily does.

Excited to be here. My name is Lucas Ramos. I'm a team lead with Steadily Insurance — one of the first agents when the company opened, and I'm still here. My specialty is working with investors and property owners who rent out their properties, and owners who occupy their properties across the country and globally. I've been in the insurance industry for almost 20 years, so I'm coming to you with a lot of knowledge tonight.

This first slide is a disclaimer that the coverage we're discussing tonight is just a broad stroke — any one policy is based on your specific need and what you're doing with your investment property. Right now Steadily is number one in the U.S. for fast, affordable insurance for rental properties in all 50 states. Landlord insurance is what every one of you will need when you purchase a home and rent it out rather than occupy it yourself.

A landlord policy covers everything from your legal liabilities to the actual dwelling — the house itself — for damages, and protects you against injuries a tenant might have. A homeowner's policy is when you buy a home and occupy it yourself; a landlord policy is when you rent it out to a tenant, a family member, or use it as an investment. That's different again from renters insurance, which your tenant would put in place.

When you rent your property out, your tenant gets renters insurance to protect their personal belongings, and it comes with some liability coverage. The best advice I can give: when you rent out an investment property, always require your tenant to carry a renters policy and make it part of the lease agreement. You cannot get a landlord policy while occupying your own home — it's like filing a liability claim against yourself.

These are all hazard-insurance policies — they cover fire, windstorm, weather-related damage, vandalism and theft. The types of water damage most policies cover: accidental water damage, like breaking a pipe while fixing it, is covered. Long-term water damage is case-by-case — if it could have been prevented and you were negligent, you may have an issue. Flood is a separate policy: a landlord or home policy does not cover a flood; you'd need a dedicated flood policy.

A homeowner's policy starts with H — an HO3. A landlord policy treats your home as a dwelling, so it starts with D. A DP1 is a very basic landlord policy with a lot of exclusions — only what is physically named is covered. A DP3 is an open-peril, all-perils policy — everything is covered except what's in the exclusions. Even on my own properties, for a long-term portfolio investment, it's always best to get a DP3.

Both policies provide liability coverage for injury, loss of rental income if a claim means your tenant can't live there, and detached structures listed on the policy — a shed, cabana or storage not attached to the house. What they don't cover: your tenant's belongings (that's their renters policy), normal wear and tear (an old HVAC breaking down is a home-warranty matter), and tenant-caused damage — that's what the security deposit is for. Terrorism, war and disease are excluded on every policy.

How much does insurance cost? I'm licensed in all 50 states, and premiums vary. For a standard home — maybe under 1,200 square feet, a long-term rental built within the last 15 years — you'd see a premium of about $1,100 or less. It depends on the size, occupancy, rebuild cost and location of the home. Under six months is a short-term rental; over six months is a long-term rental in the insurance industry.

A big misconception about deductibles: people think it's something you pay first before the insurer pays the rest. That's a myth. On a $10,000 claim with a $1,000 deductible, the insurance company pays the claim minus the deductible — they send you a check for $9,000, and you go ahead and fix what needs fixing.

Airbnb and VRBO are short-term rentals. Their own policies don't cover damage to the structure of your home — they provide liability while it's rented and cover personal property you own in the unit. Don't mistake that for not needing your own dwelling or landlord policy: you still need that in place even when contracting with Airbnb or VRBO.

There's technically no such thing as a "midterm rental" policy — occupancy determines whether it's long- or short-term. Rule of thumb: leases under six months are short-term; six to twelve months or more are long-term, and you insure accordingly. Coverages are pretty standard on a DP3: vandalism and malicious mischief — big exclusions on a basic DP1 — are only included on a DP3, along with bed-bug coverage, which matters more for short-term rentals with many tenants coming and going.

You can get a quote online in two to three minutes — just enter your investment property's address at the Steadily website and answer a few questions. We cover single-family homes, condos (where you're only responsible for the interior drywall/studs), manufactured/mobile homes, apartment buildings from five units up to a thousand, and multifamily (duplex, triplex, quadplex). We also offer vacant/builder's-risk and new-construction policies, and policies for a home you buy to renovate and then rent.

In the general mortgage overview for all of our loans, there is no U.S. credit required and no AUM — no requirement to put a minimum deposit in the bank where you obtain the loan. Foreign income is allowed. We have loan programs in all 50 states. A foreign national can get up to 75% financing; a U.S. expat up to 80%, as if you walked into a U.S. bank, with the same coverage and programs.

Once you submit your documents, we can give a loan approval within 72 hours — crucial when buying, because you need a pre-approval letter before you put an offer in. Closing times average 30 to 45 days, and you don't need to travel to the U.S. — we have at least a dozen convenient ways to close in the country where you live. Purchase, refinance, cash-out and equity releases are all possible, with 30-year amortization regardless of age (19 or 99) and a ten-year interest-only that converts to a 30-year loan for a 40-year total tenure.

We have loan programs based on common-sense underwriting — just as you'd underwrite a commercial property off its cash flow, we underwrite rental properties off the rental income, so you don't need to provide income documentation. We're very proud that 97% of the loan applications we submit are approved; normally, if there's an issue, it's the property, not the borrower. Our loan officers are all over the world, so the calendar is 24/7 in a variety of languages — we're in your time zone and speak your language.

Our most popular program — AM Express+ — is common-sense underwriting. No personal income documents; you qualify only on the property's rental income, normally one-for-one. No U.S. credit required, loan amounts as low as $150,000 at 75% LTV, so you're looking at property values of $200,000-plus. For example, if the gross rent is $2,400 and the mortgage payment (taxes, principal, insurance) is $2,400, the loan qualifies. If the rent doesn't fully cover it, the LTV may just need to be adjusted.

Our AM Investor+ requires no tax returns — since our clients are from Sydney to Shanghai, going through the tax filings of many countries would be nearly impossible. Instead we use a letter from your accountant (self-employed) or employer (employed) stating two years of income and the current year-to-date. No U.S. credit required, minimum $150,000 up to $3 million, no AUM, and a 30-to-45-day closing based on a debt-to-income ratio.

Our high-net-worth program is increasingly popular with private-bank clients whose tax returns are complicated. Rather than income, we qualify on a two-month average of their liquid portfolio — cash, stocks, bonds. There's no encumbrance on those assets; the day the loan closes you can trade or sell them. It starts at $3 million and goes up to $100 million. We take, say, a $5 million portfolio over a five-year fixed term — about $83,000 a month — and as long as the payment is below that, it qualifies.

For a U.S. expat, we make it like walking into the bank — no W-2 required, foreign income accepted, same programs and pricing with no premium for living abroad, on a 47% debt-to-income ratio. And our AM Student+ loan: if your child studies in the U.S. and you don't want them in the dorms, you qualify on the property's potential rental income even though your child lives there, and you can add your child to the loan to help them build U.S. credit.

Let's get to the questions. First: does my insurance policy provide coverage for wear and tear?

99% of the time, no. Wear and tear is covered by a home-warranty plan. If your AC or HVAC breaks down because it's old, or your 30-year-old roof is worn down and needs replacing, that's wear and tear — not covered on your dwelling policy. Same with a tenant leaving the property in poor condition: that's what the security deposit is for, and anything beyond that you'd pursue with the tenant directly.

Would you recommend investors buy an extra policy on top of the standard one for acts of God, like storm damage?

I would not — a special-form DP3 already has a lot of coverage for acts of God, storm, tornado, hurricane and tropical storms. On loss of rent: landlord insurance typically offers twelve months of loss-of-rent coverage. If you rent for $2,000 a month and a kitchen fire makes the home unliveable, while the tenant is out you're not collecting rent — so the policy replaces it, up to the total. If it takes three months to repair, you get three months, or $6,000, back in lost rental income.

Do you require a roof inspection before issuing a policy? That sounds like a Florida question — Florida is a whole different animal. Most carriers there require a roof inspection for homes 15 years and older. And for hurricane risk: yes, we cover Florida property — Steadily is partnered with over 20 carriers there, and even with Florida Citizens, the nonprofit state insurer, as a last option. If a home is 15 years or older you'll typically need a wind-mitigation and four-point inspection; favorable reports can earn good discounts.

Do you do credit checks in other countries for individual borrowers versus LLCs? We require your foreign credit report if available; some countries have no reporting agency, and that's fine. We're not looking at the score the way your home country does — we don't want to see bankruptcies or recent bad issues — we're checking that you're responsible with credit. All loans require an individual borrower, but the property can be held in an entity like an LLC.

Would your program allow a mortgage against a U.S. property to finance a purchase in another country, and does it apply to commercial or just residential? Financing is always onshore — you can't get a U.S. mortgage to buy a Norwegian property or vice versa. But if you want to buy where mortgage financing is difficult or rates are high, you can remortgage your U.S. property, pull the cash out, and use it as a cash purchase.

The feeling is mutual — we appreciate the partnership with America Mortgages. Here at Steadily, we care about your investment property. It's always about exposure and looking out for your best interest. When you buy your investment properties and come to us, we'll discuss everything and give you the knowledge to make sure your properties are insured the right way.