Rental property insurance cost

19 Replies

Hello all,

I'm paying a very high premium landlord home insurance...4K insurance to be exact. I have a 3 family rental in the Boston (Massachusetts) area market. Essentially, I'm trying to cut costs if necessary. In order to do that, I would need to know how much people are paying? and where can I find the best rate?

Try Liberty Mutual. For a two family they quoted me $ 2,0009.00 for 500 K I am getting quotes to add to my umbrella shortly but that is what I got quoted here in CT 

@Steve Bracero yes, that is non-owner occupied insurance. What do real estate investors typically buy for their rental insurance? 

I went with American Modern Insurance. 2700 is a lot better than 4500.

@Guy S.

Might want to look at:

Adam M. Ray, CIC

Duxbury & Ray Insurance Agency, Inc.

292 Waterman Ave.

PO Box 17088

Smithfield, RI 02917


@Guy S. You should not go to absolute rock bottom with insurance or you end up with a company that never pays claims, so check that out-google and yelp. Unless that is a multi million property the premium is very high. The variance from one company to another for same limits can be 200% in my experience. 

Guy,

Please check your modern American policy. I seriously just bailed on 3 properties insured by them last month. They inserted a maximum water damage coverage of $18,500.

I don’t have any multi family insurance but I have 12 sfr between 1800-3400sf worth $250-$400k each. I have $2500 deductibles with $300k insurance limits. (Where Umbrella kicks in.) they cost a total of $6494. So less than $550 each.

That does work out to $2200 for a $1.2mi fourplex but that’s with an “expensive but dependable” company.

Main reason for post was to warn about American modern. They switched the water limits on me a year ago after using them for 3 years with no claims. (At the time Allstate had a 6 policy maximum but my agent wrote for an exception.)

@Bill Brandt hmm...I guess there are a lot negative reviews on American Modern Insurance. It's a good thing it's not official yet.

What's a good landlord home insurance company then?

I’m sure they aren’t the cheapest. But I’ve had good experiences with Allstate in Vegas. I get “20% off” for multiple policies. I’ve made two $30,000 water claims that they paid instantly. (Two different houses the toilet supply lines failed. REPLACE all stainless supply lines that aren’t braided but rather look like snake scales. NOW!!!). Ps. They even sued a manufacturer and got $7k of which they gave me the first $2500 I paid as a deductible, even though they still lost money.) My only 2 MN properties (one rental one 2nd home) are insured with State Farm as they were insanely cheaper on waterfront properties than anyone else.  I’ve made claims on the 2nd home from storm damages there and they paid fast and paid contractors directly.)

Ps. If you can afford it $2500 deductibles will save you money every few years. You don’t want to make $10k claims. You want to make claims of at least $30k. 

LMK what you find. 

@Bill Brandt That's very helpful to know...thanks for letting me know about American Modern Insurance. That was going to major pitfall. Hopefully, I can just call and cancel their policy easily tomorrow ASAP. Probably need to call the lender first and keep my old policy because I haven't cancel Foremost yet. 

Yes. You don’t want to not have insurance or have the lender force insurance in place.  Both could be very expensive. but please keep looking. In my opinion and experience $4,000 for a 3 unit seems insane high. Maybe it’s an east coast price? Maybe your deductible is really low? GL. 

Hello,

Instead of switching to a different policy carrier, I opted to downgrade my premium by removing the rent loss, adding a higher deductible, and switching coverage from replacement cost to market value. The market value (without land, only structure) is a difference of 166K from the original purchase price. I fear this is not sufficient. Should I elect to have the replacement option back again? Please advise. Also, in this case, with the worst case scenario of damage, does the insurance claim this money since they own a large chunk of the investment or do I get to keep the money?

If you’re saying replacement is $166k less than purchase switch back immediately, they shouldn’t have let you choose that. If it’s 166k more that’s your walk away money. I would ask for a breakdown of how much do I save with market value  versus replacement. Most of the savings is usually in the deductible alone. 

In the case of claim the mortgage company would be paid off and then you would get the leftover. If it’s “destroyed” the city/county/state is going to make you scrape the lot clean if you don’t plan to rebuild. 

Many, if not most, properties can not be rebuilt for their market value. 

It also will depend on what value you are insuring so if you are replacement cost and the property is 500k property you will pay more then they do in the southwest. You have to shop. liberty mutual and allstate both canceled us so not my favorites. we used andover group but i cant say they will be the cheapest. They were less then liberty.

@Guy S. check REIGuard out of Kansas City.  I use them on my entire portfolio.  They are great for investors.

NREIG - Insurance for Real Estate Investors:
• Coverage available in all 50 states
• Cash Value or Replacement Value policies
• Monthly Invoicing (All Properties on one invoice)
• Only pay for the time you need coverage
• Coverage for Vacant or Occupied Properties,
and many other benefits. 

You may want to look st REI Guard out of KC if they insure your market. I too was paying very high insurance until I found them.
So far they have been good for me.

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