Landlord Policy for 4-Plex

[Anthony Harper]

I'm under contract right now for a 4-family in South City, St Louis. My objective with this landlord policy is to protect my investment, whether there is a partial loss or total loss. I've narrowed it down the choice between two carriers and there's a significant price difference between the two, as one offers replacement cost and the other actual cash value.

Purchase Price:202,500
Loan Amount: ~$160,000

Option 1: $1500/year
Coverage Amount: $205,000 - ACTUAL CASH VALUE
Includes: Liability, Earthquake, Loss of use

Option 2: $2,800/year
Coverage Amount: $500,000 - REPLACEMENT COST
Includes: Liability, Earthquake, Loss of use

I can't decide which policy is more appropriate to protect my investment. Opinions and advise is greatly appreciated.