BiggerPockets

I have to switch from Home Owners Insurance to Landlord. My agent quote me the following, please let me know your thoughts.

P.S. Someone suggested liability is too low, but did not said what would be a good coverage.

I got the quote and here is what I got.

• Policy Type: DP3
• Dwelling: $100K
• Other Structures: $7,400
• Content: $5,000
• Loss of Use: $0
• Liability Coverage: $100K
• Medical Payments: $2,000
• 10% of the property value in lost rent based on "fair market value" for the neighborhood.

It came out for $525.50.

Is there any room for improvement or this is good enough?

Looking forward to hear your thoughts.

I got a quote this week with similar numbers. $105,000 dwelling coverage, $12,000 for lost rent, $2,500 deductible and $1M liability. $573 for the year. I was happy with the price and yours sounds like it's in line.

Hi,

Great to see. My qoute was very similar.

100% Replacement Cost
Quote Results Limit Premium

Coverages
Dwelling (Coverage A) 165,000 770.00
Dwelling Extra Replacement Cost 33,000 10.00
Dwelling Extension 16,500
Personal Property (Coverage B) 8,250
Business Liability (Coverage L) each occurrence 1,000,000
Business Liability (Coverage L) annual aggregate 2,000,000
Premises Medical Payments (Coverage M) each person 5,000
Loss of Rents (Actual Loss Sustained)
Deductibles
Policy deductible 2,500 (154.00)

Total yearly $630.

I extended replacement cost/dwelling in case values rose above hense the difference between your qoute and mine.

Glad I am on the same page at least.

Charley,

I carry at least $500,000 liability on each property. I work for a large health insurance carrier and let me tell you, it does not take that many bills to eat through $100,000 of coverage.

Thank you Ryan and Peter. I'll make the adjustments. I am currently paying $800 for home owners insurance, so I will still cut some expenses there.

If the new quote comes higher than expected I will get in touch with you both so you can tell me the name of the insurance company you are using, of course, if it is not a problem with you.

I'll post the results, it may help someone else down the road.

All best!

I have two policies for rental properties, one has a liability limit of $500,000, the other $1M. They are both covered for loss of rents and full replacement cost. The premiums are $350 and $580 per year. The lower is because it is on a condo and most of the building is covered under an association policy, I only have to insure drywall and in for my unit. The added expense to increase the liability coverage was well worth it IMO, I certainly can't afford a million dollar lawsuit.

Hmmmm.... so you all seem to have extra liability coverage on your properties. I carry a $2M umbrella policy in addition to individual Landlord Policies. Do you think that does the trick, or should I have extra liability coverage on each property too.

Here's an example of one of my policies (with State Farm, NC):

Premium = $473
Deductible = 1% ($1,352)
Dwelling = $135,200
Dwelling extension = $13,520
Personal property = $6760
Loss of Rents = actual loss
Business liability = $300,000
Annual Aggregate = $600,000
Medical Payments (ea person) = $1,000 (I guess that should be more)

Does the type of property change the premiums much? In other words, assuming equal coverage, how much different are the premiums for a someone renting out a condo versus a SFH?

Jonathan, you have earthquake coverage in Missouri?

Here is an idea. Make your tenants get renters insurance. Here in CA it goes for about $12 a month, it provides an initial $100k liability and $1k medical payments, and in the event of a loss due to stupid tenants the loss report (known as a C.L.U.E. report) will make that one individuals renters insurance more expensive in the future, but your policy price wont increase. (as long as you were not determined to be at fault or negligent in the loss)