Landlord Insurance or Dweller's insurance policy

10 Replies

Hi everyone I tried searching for these topics on a specific note. Now I know that its very specific or every household. But can someone tell me what premiums or rates they are getting for their landlord insurance?

Here's my property that will soon be leased to a tenant very soon:

1830sqft, 3/2, built in 2005, in fort worth, in saginaw, (fort worth) texas. I just got off the phone with State Farms insurance and they quoted me about $1476/year which I think is pretty high isn't it?

Also this doesnt include liability insurance. Do you guys have liability insurance in your rental homes?

Impossible to answer without knowing the value of the property.  I'm paying about $1000 a year with Safeco for properties with replacement costs of $200K.  Includes liability.

@Jon Holdman  

 what if the property is worth $120k?

this farmers landlord insurance premium is insane if I compare it to your premium! its $1475/year without liability! and the limits is $178k that they will pay if my house blows up!

I'll look into safeco. correct me if im wrong, but i feel like these well known insurance companies like allstate, farmers, state farm charge really high rates while these less known companies are a lot cheaper. 

It depends on the market and the risk profile as to the rates you will get. For my California properties, I use AAA as they are the best rate. In Missouri, I actually found State Farm to be one of the best options.

If you have access to the USAA Insurance products, though, you almost certainly won't be able to find a better deal. I don't qualify so I can't say from my own personal experience, but a few of my military vet friends use and swear by USAA insurance products.

Insurance is usually based on replacement cost, not value. Replacement cost is often significantly higher than value.

Find an independent agent and let them get quotes from multiple companies.

We buy most of our insurance policies through an insurance agent (broker) and most of our properties are with Safeco.  We also have one property that we insured directly with USAA, because it was vacant during a rehab and USAA is better than Safeco about insuring vacant houses.  After we rented it, we kept it with USAA.  Both companies have good rates and policies that meet our needs. 

Be sure to get an Umbrella Policy too for extra liability coverage.  It's essential insurance for anyone holding rental property.

In addition, require your tenant to obtain a Renters Policy.  It's inexpensive insurance and good for protecting their interest and yours.

I pay about $350/year with Safeco for a landlord policy that covers a $165k condo. They were $200/year less than the other quotes I was getting for the same coverage.

The basic policy for a rented property is a Dwelling Policy, which covers the property (on a Replacement Cost or Actual Cash Value basis, or on some hybrid of the two), appurtenant structures (up to 10% of the value of the property) and basic liability.  The default liability limit is usually somewhere around $300,000, but you can increase that.  The additional premium for doing so is usually negligible.

You should also add loss of rental income - again a pretty small premium increase for valuable coverage.

Insurance companies have been adding value to these policies by including various tools to help landlords manage their properties, as well as adding packages of endorsements.  Some companies have dedicated products for landlords (like AmFam's Rental Dwelling Property Policy), and some carriers write landlord policies as Businessowners Policies (commonly called BOPs).

The primary rating basis is the valuation of the property.  Other risk aspects, such as the proximity of a fire hydrant and the age of the building, also play a role.  Claims history can have a significant impact on rate.

It's very difficult to compare apples to apples because of the way that various carriers add value to their policies.  You need to dig into the policies to see if the added coverages and tools are valuable.  (For example, if you're using a PM you don't need tenant screening tools.)  And it's important to work with a broker who understands who you are, what you have, what you need, and what the market can provide.

Hope that helps.

I just went with safeco and guess what? This may sound like an insurance commercial but I REALLY DID SAVE about $500 this year! Farmers was offering me $170k coverage for about $1571/year without liability. Safeco was offering me $140k coverage for $1067/year PLUS $300k liability plan... I was in such a rush to get insurance that I almost picked the first one. The house is worth just about $120k excluding the land it was built on.

Sometimes you can extend coverage from your personal residence to your rentals for a much smaller fee.  Some of our homes (1800sf 4/3) only cost us about $400/yr.  As @Marcia Maynard  said, be sure and get an umbrella policy.  My $1m only runs $102/yr.  (Country Financial).  

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