How much should I insure my first rental property?

Member since 2025 · 18 posts · 7 votes

Hi all,

Just entered a contract for my first rental unit. A SFH priced at 252K, 4 beds, 2 bathrooms and 1 garage. About 1500 sqf and it's a new build. How much insurance should I buy for this? Any general parameters? Thanks!

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JD MartinBusiness Member

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Rock Star Extraordinaire · Northeast, TN · Member since 2015 · 10k+ posts · 17k+ votes

Quote from @Account Closed:

Hi all,

As far as damage? Whatever you're comfortable with as far as deductible. I max out liability and keep everything under an umbrella policy because that's really where you want protection. Most insurers are going to either have actual cash value or replacement value; the latter is more expensive.

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Alfonso Partida
Real Estate Consultant · [email protected] · Member since 2024 · 51 posts · 10 votes
1y
I can connect you with one of my insurance reps if you’re interested. I’m sure they can help. Are you free for a call tomorrow?
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JD MartinBusiness Member
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Rock Star Extraordinaire · Northeast, TN · Member since 2015 · 10k+ posts · 17k+ votes
1y
Quote from @Account Closed:

Hi all,

Just entered a contract for my first rental unit. A SFH priced at 252K, 4 beds, 2 bathrooms and 1 garage. About 1500 sqf and it's a new build. How much insurance should I buy for this? Any general parameters? Thanks!
As far as damage? Whatever you're comfortable with as far as deductible. I max out liability and keep everything under an umbrella policy because that's really where you want protection. Most insurers are going to either have actual cash value or replacement value; the latter is more expensive.
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Owen RosenBusiness Member
Professional · Clinton Township, MI · Member since 2015 · 699 posts · 263 votes
1y
Quote from @Account Closed:

Hi all,

Just entered a contract for my first rental unit. A SFH priced at 252K, 4 beds, 2 bathrooms and 1 garage. About 1500 sqf and it's a new build. How much insurance should I buy for this? Any general parameters? Thanks!

Have you spoken to an insurance agent about this? You'll likely have to/want to insure the property to full replacement cost with special form perils. You should carry enough liability coverage to protect your assets in the event of a lawsuit even after defense costs.
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Terrill David
Tuscaloosa, AL · Member since 2023 · 1 post · 0 votes
1y
I live in Tuscaloosa and have some insurance contacts. DM me if you'd like a reference!
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Lindsay DavisBusiness Member
Real Estate Broker · Birmingham, AL · Member since 2019 · 327 posts · 203 votes
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@Account Closed,

Insuring for the full replacement cost would be best, in my opinion, since this is your first deal. If you’re willing to be a little more aggressive, then maybe you can opt for actual cash value. The former still seems like the better of the two approaches since you’re buying a new construction home.
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