Home Insurance (out of state investing)

6 Replies

Background: I'm about to close on 2 duplex's and 1 single family in Kansas City, MO. The average cost per home is $175,000. I live in NYC and I'm having a Property Manager oversee everything. I've been looking for quotes on insurance. The properties are all brick, built in the late 70's/early 80's, and are in A-Grade neighborhoods. My lawyer has suggested each property be held within its own separate LLC to minimize risk to me in case of lawsuit for whatever reason (i.e. trip & fall etc..)

The current owner, who lives in the area (but not in these properties), is paying respectively  $1,000/year per home. Everything is in his name. 

I was just quoted from an insurance broker $4,500-$4,800 a year per property because I'm out of state, putting everything into an LLC, and he's insuring each home for 1 million dollars. I can't help but feel like that quote is outrageous, but he claims it is reasonable. That would be more than 4x's what the current owner is paying. I have a hard time believing just because I'm out of state and putting it into an LLC that the price would skyrocket like that.

Does anyone have any experience, advice, or help they can lend?

Use National Real Estate Investment group, they let you set the replacement value of the home at what you want. I can send you a contact there. You should not be paying more than 50-60/mo unit with your values based on my KC experience.

@Rob Bianco $4k for $1M coverage is not a great premium for class A Properties.

Paying more for insurance because your out of state, or because they are not titled in your personal name, has more to do with the company your getting quotes from than anything else.

BP is full of out of state investors paying less for insurance in the KC market.

Now the seller may be insuring the buildings for much less.  If he’s insuring for $250,000, then you are paying the same “rate”, but buying 4x’s the coverage.

I’ll PM you some of the carriers offering the best rates in that market.  Some of them I do not represent.

there are many companies.  NREIG, APIA, Arcana, local to kc Agema  ... Google there and naked a few phone callsl

The local agent for Shelter is THE WORST! I would strongly discourage anyone from using Shelter in KC.