Insurance on a rent house?

Question

What sort of insurance coverage should I carry on our rent house? The appraised value of the house is $54,500. Our current insurance is charging us $1,053 for the year and it covers $119,000 for the dwelling and $119,000 for Vandalism. Are we paying too much?Thank you.

David Campbell · Answer

If it is a "A" rated company, then it sounds about right.  Make sure the policy also covers lost rents just incase the tenant would have to be put out due to damage or fire.  You can always take a higher deductible to the help lower the rate as well.

Okeoma M. · Answer

At first glance the quote does sound a little high. Is this a quote from a national insurance company or local shop? How big is the property? In my (limited) experience, the bigger operations insure a property based on replacement cost at appx $100 per sqft. and they don't have much flexibility. Are there any other factors that may be increasing the quote? (Age of property? Fireplace? Old roof?)

Just for comparison, I recently got insurance for a $105K 3200 sqft property in Texas for $1600/yr with appx $260K of coverage.

Randy E. · Answer

I'd say you are paying too much.  For four years, I paid nearly the same as you for similarly valued properties.  I went to an independent insurance agency that offered policies from many different carriers.  I ended up with policies in the $250-$300 a year range.  They don't cover vandalism, but that's a calculated risk I'm willing to take.

Jenny Seaborn · Answer

Thank you for your advise David and Christopher!

Jenny Seaborn · Answer

Thank you Randy!  Okeoma, the property is about 1,000 square feet, it was built in 1953. No fireplace and an ok roof. I am using a national insurance company. Thank you guy's for the information. I will re-search and try and get a lower price.

Insurance on a rent house?

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