How much do you pay for Landlord Insurance?

25 Replies

Hello,

I just received a Landlord Insurance quote from Liberty Mutual for $2,707. Does this seem high?

Background:

2-Family Built in 1896

Located in Cincinnati Ohio

Updated Plumbing and Electrical

I will not be owner-occupying the property

What insurance companies should I try next and what questions should I be asking?

Thank you,

Jordan

I'd suggest checking with other agents in the area or insurance brokers who deal with multiple insurance companies.  This way you can get multiple quotes to see if that is the going rate.  It sure seems high to me, but my properties are in Wisconsin and I pay much less than $1000.

Yes, that seems high.  You need to find a broker that is very good at their job, that is willing to look at 10-15 insurance companies, get quotes from them all, adjust every quote as necessary, etc, etc, etc, just to sell you one policy.  They should do an amount or work that would take you weeks to do on your own.  Good brokers and bad brokers are day and night, and trying to figure out what companies to call and get quotes from is time consuming and won't save you any money anyways.

I have Auto Owners, my properties are in LLC's it is a home owners policy with Landlord Risk, i have $5K deductibles, and they insure on property value, up to about $70K is $256/year or $350/year if it has a solid fuel heating unit (wood burning fireplace or stove) we have 18 properties spread over 2 policies, I regularity discuss with my agent if it is adequate, and she assures me it is more than I need.

It does but we don"t know a lot of things that could contribute to the cost. It could be liabity limits, distance to the fire hydrant, rental type, type of construction, etc. get some competitive quotes.

@Shawn Ackerman @Owen D. I believe this was for replacement cost. Just to give some perspective the house is under contract for 75K which is close to what it is worth.  

In this situation what kind of policy would you try to get that would provide sufficient coverage yet have a reasonable premium that does not eat into cash flow?

$2700 premium cost for a $75K property is crazy high. Is it in a high crime area (this will jack up your premium)? If you are going to keep as a rental, check with State Farm, Foremost and REI Guard. I have a bunch of SFR's and duplexes with State Farm, and I have yet to find another carrier that can beat the price with the terms I have - and I have shopped a few times to audit it. I have several multifamilies with Foremost, and they are reasonable as well.

@Jordan Bochner my newest was built in 2003, oldest would be late 1800's doesnt matter, its based on value, not replacement cost, many of mine have higher value than the insured amount, but would cover my investment, and cleanup if i had a total loss.

@Owen D. the ones you have with State Farm, are they in your personal name? I have a friend that is an agent for them, he said they cant touch mine because they are in LLC's, and would have to be at replacement cost, which in a lot of cases would be double market value

Originally posted by @Jordan Bochner :

Hello,

I just received a Landlord Insurance quote from Liberty Mutual for $2,707. Does this seem high?

Background:

2-Family Built in 1896

Located in Cincinnati Ohio

Updated Plumbing and Electrical

I will not be owner-occupying the property

What insurance companies should I try next and what questions should I be asking?

Thank you,

Jordan

 Get connected with an agent from National Insurance Brokerage from NY (I have never used them before, but I have used an independent broker and they are worlds better than a rando call center agent writing up a quote on a new policy). They are an independent brokerage In Islandia NY and use Travelers, foremost, hartford etc. like others suggested above. They can shop around for you and tell you your options for coverage. Ask lots of questions. You might need to switch over all of your insurance policies with them like your umbrella (definitely get this too and ask them about this as a landlord) and auto insurance, but its totally worth the hassle of moving your other policies. Your premium quotes will be much more competitive than you received. I ran into the 4 rental policy limit on many of the smaller providers that you wont have with a independent broker that can help you scale up in the future. Good luck!

https://nibony.com/carriers/

@Jordan Bochner Its very high!!  This is the company I now use on all my investment properties, they saved me between 30-50% per property this year and cover in all 50 states, plus a lot more benefits to investors, like monthly invoice reminder with all your properties on one invoice, in case you need to add or drop any. You only pay for the time you use it, no advanced paying with no refunds.  Insuring for CASH VALUE instead of REPLACEMENT will also help reduce the cost

Click on logo for FREE proposal info:

@Nathan Letourneau thanks for the suggestion. How old are your properties? I was told that rates are significantly higher once a property hits 100 years old.

Originally posted by @Scott Schultz :

@Jordan Bochner my newest was built in 2003, oldest would be late 1800's doesnt matter, its based on value, not replacement cost, many of mine have higher value than the insured amount, but would cover my investment, and cleanup if i had a total loss.

 Down here in FL age surely does matter - my insurance has a line item premium right there for the age of the building, even if you have a brand new roof, new mechanicals, you name it.  And some won't even cover you if you're too old, at any price.

Many of them are over/around the 100 yr mark.  Some have been completely redone, others only have minor fixes.  I have replacement cost on all of them with $1000 deductibles.  All around the $600 range.  My agent tells me age matters, sq/ft, electrical breakers or fuses, age of the roof and other things are all big factors in the premium cost.


Until 2 years ago, I had my rentals and personal property with Auto-Owners through a broker that has many companies.  There were a couple issues I had with this broker, so I finally decided to shop around to see what else was out there.  It took a little bit of time but I checked with a couple national companies (State Farm, American Family and someone else) and then with a few other brokers with multiple companies.  I ended up with a referral to one broker who I ended up going with and saved me at least a couple hundred on each property (one property was $900 savings) with better coverage plus I switched my personal home/cars/etc all over to them with substantial savings for the same or better coverages.  Currently using Foremost for most properties.

@Jordan Bochner I have used NREIG for my properties. They are functional in all 50 states and have given me a lot less in rates. They're pretty good and provide good coverage. I had a house in Buffalo, which burned 3 days after buying and insuring. I had a replacement policy and they paid me more than twice the price I bought it for. They tend to take some extra time for releasing funds, but they're a lot cheaper. I have a house insured with them in Toledo, OH. I bought it for 40k(appraise for 80k after a few touchups). I have rent loss coverage, replacement policy and 1mil per occurrence(upto 3mil a year) in liability. The monthly premium is $60.54

@Jordan Bochner Seems very, very high to me. I've had great luck with Auto-Owners on rental properties. They seem to have a lot more flexibility than some of the brands out there.

The cost to insure the property is based on the Actual Cash Value (ACV) of the building or Replacement Cost of the building - depending on the coverage you choose.  These two valuations are much different.  If you are buying the building for $75,000, this would be close to what the ACV would be - you may be including the value of the land in this amount where the insurance company is just concerned about the actual building, not the value of the land.  The replacement cost valuation is what it would cost to rebuild the building to what it is now with new material, cost to clean up the debris after a fire for example, etc (ACV vs Replacement Cost are very different amounts).  So if you are getting a quote for a replacement cost on a 100+ year old building then yes it's going to cost quite a bit to insure it as the finishings and workmanship generally are more detailed than todays builds.   You should start by asking yourself what you want in the event of a total loss.  If the home were to be destroyed by fire would you want to have the building rebuilt or would you rather just get the value of the building (not including the land as you can still sell the land) and rebuild something with that amount or walk away with that cash.  You have to look at your strategy with why you are buying the rental properties.  If it were me I would want the building replaced as my strategy is to buy and hold, having the building replaced gets me back to the position I wanted originally.  $75,000 would rebuild you much of a rental.

I would suggest calling a local insurance broker in your area as they will have more options than a direct writer/agent who only represent one insurance company.  You can also ask for a quote for replacement cost and one for ACV just to see the difference in coverage/premium.  

One other coverage you want to be sure you're getting included is Rental Income - which pays you the monthly loss in rent when your tenants are moved out because of a claim.  

Hope this helps.

Thanks, Jordan

does landlord insurance cover damage by tenents above security deposit?

If so will the insurance company pay you and then go after the renter?

I only have one 3 family, but had trouble getting a coherent quote from USAA - typically beats everyone hands down.  I went with Dabbelt Insurance (a broker) here in West Cincinnati.  He was able to get me a solution that saved money if I packaged my car with it.  He's on my RE agent's "team" and I can see why.

check with @Jason Bott, he is super helpful and can get you what you need. You'll have to retype his name with the @mention because my phone doesn't tag for some reason

Jordan that is extremely high.  Call Huesman Schmid Rybolt Road office in Cincinnati.  Nobody has come close to them when I shopped my 4 and 5 unit buildings around.    

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