Nashville, TN · Member since 2012 · 21 posts · 5 votes
I got a quote with Nationwide who has my homeowners.
They are selling me a landlord insurance for $580.
This insurance covers the Dwelling for $135k, Extended coverage (not sure what that includes) and vandalism and mischief. Deductible is $1000
I did not want personal property coverage since the appliances I am leaving do not cost more than $1000 combined, but even with that it was going to be $630. Still a lot cheaper than homeowners.
This sounds like really good price when my homeowner's policy is $800 a year. I was expecting it for be a lot more since that's what many articles claimed landlord's policy to be at least 20% more than homeowners policy, so I wonder If I am missing some essential coverage that should be included and that is why is not more expensive than my homeowners?
Nationwide stated this is all the coverages they offer for this type of policy.
I am a property adjuster for an insurance company and I can confirm what he's saying. The exposure on your rental is far lower than that of your rental, but if you were able to back into how the ins co's underwriter is arriving at your rate, you'd probably see that 100k of coverage for the dwelling on a rental is much more expensive than 100k of coverage for a owner occupied residence.
"Landlord Insurance" can mean a lot of different things, from a simple property policy to a sophisticated business policy. The Nationwide offering seems to be missing loss of rents, which I think is important. (It covers lost rental income from a covered loss.) It is probably a basic Dwelling Policy, which would explain the lower cost.
You would probably benefit from sitting down and talking to a broker, so that you at least know the kind of coverage that is available and the rates for that coverage.
To start, landlord policies offer far less coverage than a homeowners policy. Your personal belongings are a lot less and your covered perils will probably be less. A lot of homeowners policies are an all risk policy to include theft. Landlord policies usually spell out the coverages (which are a lot less than homeowners policies) and you purchase coverage a la carte.
Landlord policies coverage for coverage are usually more expensive than homeowners policies. However, you can strip the policy down to a basic fire dwelling policy without additional coverages and it will probably be less than what you are paying now.
My conclusion is landlord policies are more expensive for the same coverage because of the risk of an unknown tenant who is not the owner and does not show the home the same care as a homeowner. But most landlord policies are stripped down to the basics which makes them SEEM less expensive.
I am a property adjuster for an insurance company and I can confirm what he's saying. The exposure on your rental is far lower than that of your rental, but if you were able to back into how the ins co's underwriter is arriving at your rate, you'd probably see that 100k of coverage for the dwelling on a rental is much more expensive than 100k of coverage for a owner occupied residence.