Insurance Coverage on Rentals

[Kyle Alexander]

Hello all, still trying to get my first property. I'm looking at a duplex in TX, and trying to do some calculations to see if the price is worth it.  Does anyone have a rule of thumb that they use for their calculations for insurance costs on a potential property? What kind of coverage would you carry? I understand that the best way is to call an agent to get numbers on insurance, but I was just wondering if there is a quicker formula or rule of thumb that can help to save a little time before getting to the point of calling an insurance agent.  Any helpful input will be greatly appreciated!! 

Thank You

Kyle Alexander

[Bo Bond]

Kyle,

I'd love to be more direct for you, but you're in Harris County!  LOL!  If that's where you plan on investing, then be very aware of buying in high hazard flood zones as flood insurance will be required and certainly impact all your calculations.  Flood zones and maps have certainly been amended since Harvey, so be sure to looking into this with any and all properties in your area.

We quote and write business in this area and the rates really do fluctuate a lot.  It all depends on "location".  Some carriers go by county, while some go by zip code, and others go by location.  I know a number of carriers that deem South of I-10 and East of Hwy. 288 as Tier 1, and anything else as Tier 2.  Some list Harris and any coastal county as Tier 1.  It's all up to the carrier your agent approaches.

Given your general area, I just don't think there's going to be a safe "rule of thumb" that you can go by.  However, we've (RECENTLY) seen rates between .75 and 1.10 (or more) from the coast to northern Harris County.  

EXAMPLE CALCULATIONS BELOW (typically with a $5k standard deductible and a 2% wind/hail/hurricane):

Tier 2 (Northern Harris and Ft. Bend Counties):

$200,000 RCV x .0075 = $1,500 (for property only).  $80 - $100 per location for GL = $1,600

Tier 1 (Southern Harris, Galveston, Chambers, and Brazoria Counties):

$200,000 RCV x .0110 = $2,200 (for property only).  $80 - $100 per location for GL = $2,300

Hope this helps!  Good luck!