Landlords insurance! Can anyone recommend a reliable company?

Question

Jennifer T. · Answer

Another trick I've found is it is often cheaper to separate out the two "pieces" of property insurance, ie "dwelling" and "liability".  In other words, have a "dwelling" insurance policy which insures the structure, but does not have liability.  This type can also include NSC.  And then have a separate policy just for liability.

That would normally make no sense because it's usually cheaper to bundle things.  Except, in NOLA, there are only a handful of property insurance carriers.  So there isn't much competition.  Whereas, liability only policies will have just as many choices as anywhere else.

With all that said, I've found NREIG to be a good enough value that I don't need to do that.

Troy Williams · Answer

Hi @Jennifer T.   wow, and thanks for the awesome reply.... just the feedback I was looking for.   The NSC, flood and basic property insurance seems like it is going to add up to $300-400/mth for non-occupied multi unit (2-3 units), based on a price between $100k-250k value.

INSURANCE: $300-400/mth

• NSC: $150-200/mth
• Flood Insurance: $50-80/mth
• Home Owner's Insurance (HO-2 or HO-3 I assume): $80 -120/mth

I'm probably still a bit off, but at least I know insurance is more than I planned for.   Geez that's high, but like you said, the ROI doesn't seem too bad.  $1200 for a 2bd/1bth each duplex seems like still a decent Cash on Cash Return each month.

Thanks for sharing!  Let's connect...

Jennifer T. · Answer

Since I rattled on so much about insurance to answer your first questions, lol.  I decided to start a new post for the other ones.

Despite the high insurance rates, I do think NOLA is a decent place for buy 'n hold ROI.  It's no Indy or Cleveland, lol.  But it's not bad.  I'm glad this is where I happened to be living when I caught the REI bug!  Like anything else, property values and rental rates can vary substantially, depending on what area you are talking about.  Yes, you can find properties all day long at a $1.25 sq ft rental rate.  You can find much higher than that also, but the purchase price of the property will be much higher as well.  We all know how that goes!

I live in an area called Mid-City.  Popular, increasingly trendy area.  1-4 miles from the French Quarter/Downtown areas.  So nearby, but not right on top of it.  Good mid-range home values and rents.  Though, even within Mid-City, there are a few ultra wealthy areas.  I rent out the other side of my personal duplex for $1.45/sq ft.  It's a 2 bed/1ba that I have rented for $1200/month.

My other properties are further out from the city center and in safe, but more lower middle to middle class neighborhoods.  New Orleans East and the Westbank, to be exact.  Properties are SO much cheaper to buy, but the rental rates are more in the $1.00-$1.15/sq ft range.

As for utilities, I don't pay any for my tenants.  But all my units have separate meters for both electricity and water.  Of course, you can always find exceptions.  But, generally speaking, as long as there are separate meters, the tenants pay for their own utilities in this area.  Larger places, like apartment complexes, typically pay the water/trash/sewerage themselves because those utilities aren't metered out separately.  But electricity almost always is, even for complexes, so tenant's are responsible for their own.

A little more local info on how the utilities work.  I am speaking specifically of Orleans parish (county).  Water/trash/sewerage is all on the same bill.  The $ amount for sewerage is tied to the water usage.  The trash is a set, monthly $24 per unit, ie a duplex is a flat $48/month fee.  Electricity and gas are on the same bill.  Not all properties have gas, but a lot do.  Heck, one of my duplexes has gas for unit and not for the other, lol.

Feel free to PM me if you have more NOLA questions.  I'd love to meet up for coffee, if you ever make your way down here.

Jennifer T. · Answer

Your first paragraph hit on one of the bigger negatives for investing in NOLA.  Our property insurance rates are astronomical.  Last I heard, they were second highest in the country, with Miami being #1.

If you have a loan on your property, your lender will typically require you to carry "Named Storm Coverage" (NSC) insurance.  Basically, if your property is damaged by a storm big enough to have a name, you're covered.  That type of insurance is the big money.  If you don't have a loan on the property, you can choose to exclude named storm coverage.  Your premium will drop in half or more.  But, if Hurricane XYZ rips the roof off the property and rainfall causes water damage throughout.  That's an exclusion.  You're SOL.

I have three properties with NREIG.  One of them I have a loan on and have the NSC.  The monthly premium on that one is about $165/month for an insurance value of $125K (duplex).  Flood insurance not included.  The other two, I own outright and do NOT have NSC.  One of them is around $65/month for $75K in insurance (SFH), the other is $85/month for $125K (duplex).  I'm not saying that's wise and I don't like it.  But I also didn't like NREIG's NSC terms.  It's been a couple years and this might have changed but, the last time I checked, the lowest deductible I could choose was $10K.    I can replace a roof and a good bit of drywall for $10K, plus they are both brick houses so siding isn't a worry.  As such, we took the gamble we won't have a catastrophic loss from a NS and, if there is any damage, the same $10K we'd have to pay anyway with insurance will take us a good way to being "whole".

My own personal home, which is a duplex, is insured at a $250K value and I pay $3600/year for that.  But there is also some contents coverage, since it's my house.

NREIG had just started carrying flood insurance when I bought my first policy with them 3 years ago.  They were RIDICULOUSLY higher than my local agent.  The NREIG agent even gave me a warning about that, before she looked up the info.  As such, I carry all my flood insurance through a local agent.

Most of you will probably find this shocking but, when FEMA changed their flood maps last year, many parts of NOLA are no longer in a flood zone.  Flood insurance rates plummeted.  Not often you see insurance rates go down!  But what kills is that FEMA levies a $250 flat fee, on top of the insurance amount, for non-owner occupied properties and/or multi's.  As an example, my personal duplex is insured under my flood policy for about the same amount $260K, including contents.  It is now in an X flood zone, ie no flood zone.  The insurance part of the annual premium is around $400.  But then they tack on that $250 flat fee.  Even though it is MY home.  Because it's a duplex.  Not a SFH.  Jerks.

Kimberly Jones · Answer

Yep, I have used NREIG for multitudes of clients. They are awesome!  NREIG stands for National Real Estate Insurance Group.

Jennifer T. · Answer

I forget what the initials stand for, but I use NREIG for the insurance on all my rental properties.  As far as I know, they are a nationwide company.  My properties are all in New Orleans.  Which has similar issues to FL, in that nobody wants to insure here.

Troy Williams · Answer

Awesome. Well noted. thx again for sharing!!!

Troy Williams · Answer

Hi @Jennifer T. & @Kimberly Jones

Is REIG provding all your insurance, including flood, hurricane, etc, i'm finding quotes ranging from $600/yr to $1,500/yr for multi-family residential, but not clear how that works within the different flood zones and asset types.

Unrelated to insurance but NO properties in general. I'm an active investor from CO looking into New Orleans area.  Early research tells me that rental rates are pretty good here (about $1.25 per sqft), but would like to see if real investors on the ground experience the same.

Utility costs. The only reference I have is for my duplex and triplex properties in CO; sewage, water, garbage and share common area fees paid by me; tenant pays gas and electric. What's the standard in New Orleans?

Much appreciated any experience you can share.d triplex properties in CO; sewage, water, garbage and share common area fees paid by me; tenant pays gas and electric. What's the standard in New Orleans?

Much appreciated any experience the BP community can share.

Craig Dell · Answer

See if Erie Insurance services your location.

Landlords insurance! Can anyone recommend a reliable company?

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