My question is how to determine the proper amount of walls-in insurance to carry.
The unit is a 1600 sqft, 4 bed, 2 1/2 bath, 2-story condo with 2 car detached garage in Orange County, CA. Since the HOA covers the exterior I only need to have a walls-in policy.
What is a good way to determine the right amount of building coverage? I don’t want to be underinsured, but even the agent said their recommended “rule of thumb” amounts seemed really high for the unit. Since it is a 2 story unit I do worry about a leak in an upper bathroom creating problems on both floors.
What deductibles do most investors have? $1,000? $5,000? Do you base it on the cash flow/reserves saved for the property?
I’m looking for reasoning that I can apply to my current properties as well as future investments.
How much did you end up paying for your Walls-in insurance? Did you go for the higher deductible? I’m I a similar situation, only it’s a 1000 Sqft condo.