Property Insurance Estimation

14 Replies

Is there a rule of thumb to estimate property insurance on a multi family without going to a broker/agent? I'm in Cleveland, Ohio if it makes a difference. There has to be a way to some kind of ballpark estimate.

@Matthew Jure there is not an accurate way to do it as there are so many variables.  Age of he building, construction and building updates drive the underwriting acceptability of the property.

Then there is the crime score the insurance companies use that I don't even have access to or understand.

Easiest thing to do is get 1 quote on the type of property you are looking to buy.  You can then use those rates if you are buying the same like and kind properties in the same zip code.  That will be much more accurate than a Rule of thumb of $500 per $100k.

Originally posted by @Matthew Jure :

Is there a rule of thumb to estimate property insurance on a multi family without going to a broker/agent? I'm in Cleveland, Ohio if it makes a difference. There has to be a way to some kind of ballpark estimate.

 You can get a a typical non owner occupied Cleveland area duplex insured for around $600-$800/yr.

@Matthew Jure

I have a duplex in Cleveland that I pay roughly $700 per year on, a Duplex in Lakewood that runs me around $900 per year and a Duplex in Shaker Heights that runs around $1,100 per year.  From what I can tell, the nicer the area, the more expensive the insurance.  I'm not sure exactly why, because my Lakewood property appraised about $180k this year and the Shaker property at $150k, but the insurance is a bit higher for Shaker.

I did recently switch my insurance, I was paying $900, $1,100 and $1,500 respectively with my previous company (even though they sound a lot higher, they were actually the cheapest of 4 different companies that I shopped who were all local in OH!  It's madness lol).  There really is no good way to estimate insurance costs unless you have a similar property already in that area.  I always run my numbers with a higher estimate to make sure, then get quotes from my insurance agent before I close on the property.

I hope that helps!

I think it’s useful to have a good independent insurance agent you can call and run these things by.  It varies so much by region and myriad other variables that it’s very hard to generalize on a forum like this. 

@Jeremy D Baty @Matthew Jure

If you have several properties, you can bundle them up on a single policy with a high liability coverage for less money.  I ran the policy by my close friend and business mentor who wrote the previous policy (he owns an insurance brokerage in SoCal) and he said he couldn't find anything wrong with it.  I currently have 7 properties bundled up in the policy (I couldn't get my 30+ unit multifamily in the policy because it was way more than the individual policy, so I'm not sure how that makes sense lol).  He said the more properties within the policy, the better the rate.

For non owner occupied properties the cheapest / easiest provider is Foremost (owned by Farmers) 

If you have a really beat up property that Foremost won't take you could go with American Modern. They will insure literally anything.

@Matthew Jure There are two general ways to insure your property.

Since you are living in your double you can insure it as owner occupied (with some companies) as long as you acknowledge it is a duplex. You still want to make sure your tenant on the other side has their own Renters Insurance policy to cover their property and liability.

If you are house hacking your half of the duplex with a room mate you should acknowledge them on the policy as well - and same as above your roomie should get their own Renters policy.

I insure a lot of owner occupied 1 to 4 family houses this way - it's a very common set up in Lakewood.

The other way to set this up is to buy a Landlord policy on the entire building and a Renters policy for your self and your property. And same as above the tenants on the other half of the duplex need to buy their own Renters policy.

The current condition of the building will typically indicate which scenario will work best for you.