Insurance Issue - Policy Change After Closing

5 Replies

I recently closed on a 3-unit rental property.  During the due diligence and loan application period, I had an insurance policy set up.  This was a "Rental Dwelling Policy" for a 3-unit rental property.  Escrow has been set up for this policy, which costs $1,188/yr.

AFTER closing and having new tenants move in, my insurance agent called and said that underwriting had rejected the policy.  He said they require him to write an "apartment building policy," which will now cost $3,200/yr.  That's a huge difference!  

Do I have any options here?

Talk to other companies or a broker. You should be able to find a landlord policy that’ll cover a 3-unit property.

The bank doesn’t really care who you use for insurance as long as you have it.

Originally posted by @Jesse Smith :

I recently closed on a 3-unit rental property.  During the due diligence and loan application period, I had an insurance policy set up.  This was a "Rental Dwelling Policy" for a 3-unit rental property.  Escrow has been set up for this policy, which costs $1,188/yr.

AFTER closing and having new tenants move in, my insurance agent called and said that underwriting had rejected the policy.  He said they require him to write an "apartment building policy," which will now cost $3,200/yr.  That's a huge difference!  

Do I have any options here?

 I agree, find another option.  $3,200 sounds high for MO.

Originally posted by @Mike McCarthy :

Talk to other companies or a broker. You should be able to find a landlord policy that’ll cover a 3-unit property.

The bank doesn’t really care who you use for insurance as long as you have it.

 That's what I was thinking.  Do you know any agencies specifically?  

I just got a 3-unit policy through my local Allstate agent.  I've found that they have decent pricing and good coverage.

I'm sure there are lots of other options too in your area.