Help!! Type and cost of 4-plex insurance

Multi-Family and Apartment Investing
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Help!! Type and cost of 4-plex insurance

Travis Thornton
Baton Rouge, LA · Member since 2013 · 8 posts · 0 votes

I need help,

My brother is investing in a 4-plex where he will be an owner-occupant. I keep getting different answers as to what type we should get, and how much it will cost. He spoke with a salesman today, and was told that each unit has to be insured individually, and our payment will be $400/month. This can't be right, can it? If so, we're sunk. Help please!

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Matt Devincenzo
Investor · Clairemont, CA · Member since 2011 · 3k+ posts · 2k+ votes
13y

Not sure if the OO status makes a difference but you can try National Real Estate Investors Group Insurance I had an issue with insurance last week and they were cheaper with better liability limits than anyone else I found. http://www.nreinsurance.com/.

Note: I'm just a happy customer no other affiliation.

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  • Aaron Mazzrillo
    Investor · Riverside, CA · Member since 2011 · 2k+ posts · 3k+ votes
    13y

    Doesn't sound right to me. One policy covering the entire building should do as long as you have a liability for being the landlord as well. But, you are in that funky state with a legal system primarily based on French and Spanish codes and ultimately Roman law, as opposed to English common law like the other 49 states so I'm not really sure!?!?!

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  • Diego A.
    Fourplex Investor · College Station, TX · Member since 2013 · 57 posts · 3 votes
    13y

    Hi Travis Thornton,

    I think that is way to high. We bought an owner-occupied 4-plex for our first investment and we had to paid no more than $110/month for the entire building and that included everything we needed to cover ourselves.
    Maybe it is because you are in Lousiana but I doubt it. I think you need to find someone else. Some one for Louisiana care to comment?

    Good luck!

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  • Pete Patel
    Investor · Knoxville, TN · Member since 2011 · 23 posts · 3 votes
    13y

    Travis,
    We have a 12 plex in BR and are paying around $450/mo ($1300 down). The ins agent we use is also an investor in the area. PM me and I can fwd his info to you.

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  • Matt Devincenzo
    Investor · Clairemont, CA · Member since 2011 · 3k+ posts · 2k+ votes
    13y

    Not sure if the OO status makes a difference but you can try National Real Estate Investors Group Insurance I had an issue with insurance last week and they were cheaper with better liability limits than anyone else I found. http://www.nreinsurance.com/.

    Note: I'm just a happy customer no other affiliation.

    2Reply
  • Tim Norris
    Investor · Kansas City, MO · Member since 2008 · 153 posts · 81 votes
    13y

    Travis---some personal lines insurers would cover it on a homeowners policy form (since owner occupied), even with the 3 tenants. His cost would be less than that which you mentioned, and you'd pick up coverage for your contents and personal liability. However, make sure those 3 tenants all carry renters insurance! Have him check with the company that insurers his vehicle(s) first.

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  • Antonio Adams
    Real Estate Agent · Dallas, TX · Member since 2015 · 5 posts · 1 vote
    10y

    Hey @Diego A.,

    Can you share which homeowners insurance provider you used? I'm about to buy my first fourplex in Dallas TX and don't want to pay more than needed. Thanks in advance.

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  • Courtney Wozcoz
    Saint Petersburg, FL · Member since 2016 · 9 posts · 2 votes
    10y
    What type of Lon did he do for his 4 plex? Did he create an LLC?
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  • Diego A.
    Fourplex Investor · College Station, TX · Member since 2013 · 57 posts · 3 votes
    10y

    Hi @Antonio Adams, sorry for the late response but work has been crazy! Anyway, because we bought our 4-plex owner occupied. We shopped around and the best provider at the time was Farmers. If you want the contact info of the insurance agent let me know (she is in College Station). I hope that helps.

    Hi @Courtney Wozcoz was hat question for me? well if it was.... I did a FHA loan and I did not created an LLC at the time because of the FHA loan (It has to be on your name)

    Hope that helps, have a successful day! 

    1Reply
  • Dave MeyerPro Member
    Head of Real Estate Investing at BiggerPockets · Seattle, WA · Member since 2015 · 356 posts · 830 votes
    10y

    I have a 4-plex in Denver and pay about $2500/year total for all 4. You should look for a commercial-style policy that just covers the dwelling and appliances. It won't cover your, or your tenants' personal belongings, but you can get separate insurance for that. 

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  • Eric H.
    Insurance Agent · San Antonio, TX · Member since 2016 · 100 posts · 36 votes
    10y

    property insurance in LA is much much more expensive than in other states. There are options depending on if the building is owner occupied or not and if not what type of coverage the insured has on his primary residence as well as where its located. 

    A non-owner occupied insured will need at minimum a DP policy that covers the building and likely a flood ploicy in La. If the insured does not have sufficient personal liability insurance in excess of $300k and a $1 million dollar plus umbrella policy or if the insured lives in the property a more robust DP policy will be in order along with the umbrella and flood policies.

    Individual HO-4 policies will be needed for each tenant but that is the responsibility of your tenants. 

    You may do well to consult a reputable broker who writes for multiple insurers

    Best of Luck

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  • Jeff B.
    Buy & Hold Owner · Redlands, CA · Member since 2015 · 5k+ posts · 2k+ votes
    10y

    Agree, Farmers is great choice.  Our 6unit costs ~328/mo for a Landlord Policy which includes 1,000,000 liability coverage.

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  • Joel Florek
    Rental Property Investor · Michigan City, IN · Member since 2015 · 530 posts · 741 votes
    10y

    @Travis Thornton I own an owner occupied 4 unit and pay $1450 a year for insurance. It would be $1800 if I didn't live there. I have mine through State Farm. Shop around, each company has different guidelines and know that if you no longer live there but still have the owner occupied policy you could be in a world of hurt if something goes wrong.

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