Inconsistent Insuance for BPers

13 Replies

I've been scanning and reading a lot of posts for the last few months and when people do their breakdowns of their buy and hold investments, I commonly see their insurance as extremely low. Often times, I see something along the lines of $800 a year or $100 a month for insurance. I'm not sure what/where you guys get your insurance but mine is much more than that. Yes I have the replacement cost policy and it is for a non owner occupied MF. I have done a ton of leg work getting quotes from a lot lf companies and mine is still the best around. I have literally called every insurance company mentioned on BP. What do you guys think? Is $800 a year for insurance for real and attainable? Mine is over 3x that amount. Is it just me?

Title should read, "Inconsitent Insurance for BPers"

I pay 650 per year for the houses that I have. 

Size, age and location determine insurance cost. You can only compare pricing with other local investors.

@Stephen Bell There are too many variables: state, age of property, cost of property, prior claims history, etc. It's NOT comparable, because every state is going to be different, as one state may have minimal natural catastrophes; whereas, another state may have floods, hurricanes, etc that are taken into consideration. 

Also, a 2010 built property is likely going to be less to insure (anywhere in the U.S) than a property built in 1902 in Massachusetts, Maine, etc. 

Trust me, when I read some of the posts from people in one state who are comparing their inexpensive/expensive rates to another state it is frustrating, because there are too many variables that affect the actual premium that is paid. Further, some people will get the bottom basement, least expensive insurance possible; whereas, others will want to insure any and every conceivable thing possible (that can be insured).

Example, one person may have a 50k property in Idaho, that they are insuring with a 5k deductible, and the least coverage possible, and can be paying $600 a year. Another person in another state, can be insuring a $250k property with all the bells and whistles and can be paying $2000. They are: a. in different states; b. insuring properties worth considerably different values; c. we don't know the age of the property, and d. we don't know if there are prior claims on either the insured and/or the property they are insuring (each can, to some extent, play a role in premiums).

This varies in commercial also. When we look at a 5 million property for example the insurance might be really low for 5,000.

What happens is the seller has multiple properties and once they hit a certain policy level it is cheap for them to add on another property. For an investor with that one property the policy costs will be much higher.

So a buyer needs to look at WHAT THEIR COSTS WILL BE as the new owner and not what solely what the current owners numbers are.   

After I purchased my duplex, my insurance company sent an agent to evaluate the replacement cost of the property.  I had to go with what they determined.  He said it all depends on the risk of location and the materials used to build.  I'm in a no flood zone, no earthquake, and materials are usual construction type, not gold leaf and marble et cetera.

So yes, it depends.  I'm paying $1429 per year.

@Stephen Bell

I'm up in NH and thought it was impossible too. Then I bought a 900 sq ft 225k single house a quarter mile from the full time fire station with s hydrant right outside. Came in at 800/yr. 

All about variables but yes does seem to be way more expensive up in New England. 

I would agree, insurance quoted here is often  very  low.  In the states I have invested in the northeast I have found insurance policies to be higher even factoring in the per dollar value.  Age of housing, rental target population (students are higher), coastal, fire rating, construction type,  all drive the cost up.   I just hope people are estimating accurately.  The last property we purchased our policy cost was 4x the cost of the previous owner so do not use a previous owner's cost.

 The other thing  to consider is if you can get insurance for the property with your current company.   We cannot get one home out of the state fair plan. I would group policies but it is hard to find a company that will write  based on the different properties we have.

@Stephen Bell All you can do is copy your Dec page, redact the prices and send it out for Quotes. That way they're comparing Apples to Apples.

Put your Declaration page on here, maybe someone will get it lower for you.

$2400/year does seem high, unless you've had Claims.

I've gotten several quotes for some duplexes in IN that are around $1300-1500 range. That is for a ~1990s built, 2500ish sq ft , 140-160k+ building. On the other side, I am insuring my home in WV, for ~$900-1000/year, 1800 sq ft and costs about 150k.

As others have said... it doesn't really matter what ANYONE else is getting, it only matters what you will get so quotes are you friend.

Insurance rates vary state to state. $800 estimates are actually high, I was paying $560 a year in NC and VA. You can not compare rates in CT to other states so I would not be using what other people in other states use as estimates for insurance in your state.

As everyone else said the variables are so high from location to location, to company, to credit score etc.  Just as an example comparing two of my own properties that are in two different states, Maryland and Massachusetts with similar values of about $425k each, my Maryland policy is about $800 while my Massachusetts property is $1900.

Russell Brazil, Real Estate Agent in Maryland (#648402), Virginia (#0225219736), District of Columbia (#SP98375353), and Massachusetts (#9​0​5​2​3​4​6)
(301) 893-4635

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