Rental Insurance Question

9 Replies

I am in the process of attempting to purchase my first multi-family dwelling.  It is a triplex.  When I called my insurance company, State Farm, to check out insurance rates so I can run the numbers, I was told anything over a duplex they consider commercial.  

They quoted me a duplex price, and a tri-plex price and it was almost an $80 difference per month for the exact same insurance rates.  Grrrrr....My first reaction was what a crock of crap, but my second reaction was to wonder if this is an industry norm.  Does every insurance company classify 3 and above as commercial or just State Farm?  

Where do you have your insurance through and what are their guidelines on this?  Also, what numbers do you use to know whether you are adequately covered, but not over covered?  

Thank you for your time and help!


Companies approach the 3 & 4 family dwellings differently. Some will write those and others will not. Some companies will write a 3 or 4 family if it is owner occupied but not if full rented. I was working on an owner occupied 4 family here in CT earlier this week and slightly less than half of our markets would write it. Just about all companies will go to a commercial policy when you get over 4 units. I would look to an Independent agent who has multiple markets to find who is writing those and who has the best price/coverage. Good luck

I'm experiencing similar problems with State Farm. I have 2 duplexes insured for about $1300 per year, total. I'm considering a 4 plex, worth about the same thing as the total of the duplexes but the insurance cost will be $2200 annually instead of $1300. WHY?

If it’s helpful, I just recently got a 3-unit covered by Allstate for only a bit more than nearby SFH. I’m sure it varies by state, but they’ve been consistently helpful and easy to work with.
@Lisa Kovac We experienced the same problem with State Farm. We eventually went with American Modern in Cincinnati and they’ve been great. Do lots of work in the rental space.

We left State Farm after 30+ years when we got our first SFH in 2016. They were quoting me $2100/yr for an 800SqFt 2x1 home whereas my own 3100SqFt home was only $1900/yr. Their Umbrella rates were also through the roof..literally!

We went with Nationwide Private Client back then.  However now that I'm looking at 2-4 MFH's, Nationwide had been just out of the reasonable range as well.  I haven't found any of the national brands that are friendly.  I was going to look in the Cincinnati area when we finally found a property.  Thanks @Rob Wilcox for that referral, we'll call American Modern!

We used State Farm for quite awhile on our 4 families in Cincinnati. They quit underwriting anything new that did not have two exits to a unit. We had a couple 4 family properties with American Modern and they were cheaper. We ended working with Pathway Insurance (broker) to get a blanket policy and it was way cheaper than any other option.