I am in the process of purchasing a multi family property ( 4 units) and was wondering what companies have the best insurance for that type of property.
It really depends on the age, location, condition and a number of other factors with the property. I would suggest speaking to independent insurance agencies in your state, 1 by 1, and seeing what they can find for you. Normally, independent agencies work with 10-15+ providers and are able to cover a lot of the work for you. Also find out where the seller has insured their property.
@Charles Carillo great information, thanks.
Hey @Mayi Nelson, @Charles Carillo is right, finding a solid independent agent that can write insurance in your state is the best bet. Insurance is pretty nuanced and each insurance company has their own “appetite” of things they look for in a property.
An independent agent has access and strong relationships with multiple insurance companies. The agent will be able to have a conversation with you and determine what type of coverage is best for you, then he/she will be able to run your property through multiple insurance companies to find the best rate.
I echo Charles and Ryan's recommendation that you look for Independent Agents to shop the coverage for you.
I would add that, if you are planning a Renovation, you also check to see if the agents work with Contractors or Builders. They may have more markets for the Builders Risk coverage you will need.
Below is a previous post I did. I think some of the info may help you in this process:
Here are some things to look for from an Insurance prospective:
1.Any in-ground tanks (active or inactive)
2.Any Knob & Tube or Aluminum Wiring
3.If built before 1978, does the building have Lead Safe certifications
4.Any wood stoves or secondary heating units. If so, were permits pulled & were they installed by a professional
5.Are any of the homes rented to students
6.Is there a flat roof
7.are there asbestos shingles - Heating systems- PlumbingSome companies will not write properties with systems that have not been updated
The Year that the following were updated (either partially or fully) would be good to know:
- Heating systems
Some companies will not write properties with systems that have not been updated.
As long as you are living there, the proper policy for a 1-4 family is a "Homeowners" policyc. If the property is solely tenant occupied you will be looking for a Dwelling/Fire Policy (may be called a Landorrd policy or similar name) or a commercial policy such as a Businessowners or Package polciy.
Most homeowers or dwelliing/fire policies include:
1. Dwelling (Building coverage)
The limit should be based on the Replacement Cost of the building (cost to rebuild with
the same kind and quality excluding the foundation)
2. Contents (Personal Property): most homeowners policies give a set % of the Building
limit for Contents. Dwelling/Fire policies requrie that you request a limit for conents.
3. Detached Structures: for other buildings on the property (ie. sheds & detached garages)
Again, there is normally an included limit of 10% of the building limit. That can be increased
4. Loss of Use / Loss of Rents: Normally, there is a 20% included limit. Loss of use is for
your additional expenses if you can not live there due to a covered claim (ie. Fire). The
Loss of Rents is for the loss of Rental income if the tenants can not occupy the house
after a covered loss.
5. Personal Liability: For claims due to Bodily Injury or Property Damage that you become
Liable for and which is covered under the policy. Companies normally offer limits up to
$500,000 but some offer $1,000,000. Buy the max.
6. Medical Payments: Provides coverage for an injury suffered on the premises. Does not
require proof that you were at fault. Used to keep small loses into becoming lawsuits.
Normally offered up to $5,000 but check to see if higher limits are available.
7. Deductible: This is not a coverage but rather your portion of a claim. Most better policies
will not have a deductible for either the Liability or Medical payments coverage. It will
apply to the other 4 coverages. You can select the amount of the deductible, usually
ranges from $500 to $5,000. The higher the deductible the lower your overall premium
but get quotes on all the deductibles you are interested in. Sometimes the incremental
savings from $1,000 to $2,500 or from $2,500 to $5,000 are too small to make the higher
deductible worthwhile. ***depending on how far the house is from the coast, you may
also be required to have a separate Wind or Hurricane deductible. Most times, the
deductible will be 2% to 5% of the building value. That is a significant amount
(on a $500,000 building that comes to $10,000 for 2% or $25,000 for 5%). A policy
with a higher premium may be a better deal if it does not have a wind deductible.
There are many endorsements that are available on the homeowners policy. Without
knowing the details I can not suggest which would be right to add on.
Several you should
pay attention to are:
- Ordinance & Law: Provides additional building coverage to deal with rebuilding cost
Increases due to changes in Zoning or Building laws
- Personal Injury Liability: Libel, defimation of character, wrongful imprisionment, etc.
(normally recommended, especially if you are a landlord)
- Water Backup: For water damage due to the backup of Sewers or Drains.
- Personal Articles: Coverage for belongings that have a special or collectors value
such as Jewelery, Furs, Fine Arts, Collectibles, etc...
Your age should not be a factor on the pricing but, depending on the company these other factors may get you credits:
- Insurance Score (company pulls certain info out of your credit report)
It is not your credit score but generally better credit will result in a better score
- Time at your job
- Education level
- time at current residence
@John Mocker great information. Thanks!