Hello Fellow Landlords,

     I'm closing on a property Friday and I've gotten a bunch of insurance quotes.  But I've realized these aren't apples to apples.    I'm buying a property for $78,000.  I'm thinking for 1 million dollars in limits.  What I don't know what to do is what coverages to ask for.    In addition, this property has a commercial unit which has added a layer of complication.  Any help or articles you can point me to will help.

@Chad Kastel here is a BP blog post I did on this topic that should help.

www.biggerpockets.com/renewsblog/insurance...

@Jason Bott .  Thanks for the response.  This article helps.   A few follow up questions:

1. How do I determine which agents are NOT bound to a single provider?  Is this something I just ask directly?

2.  How do I determine how much insurance I need.  The quotes I'm getting are offering 1 million liability that has 2 million of total liability per year?    Is this industry standard?   How much insurance do I want?  Is this based on how much the property is worth?  Is this based on my net worth?  Am I supposed to get umbrella insurance?  All my quotes have also determine different values for the building.  None of them have included "loss of rent/business coverage"

I'm happy to read any and all articles.

Hi Chad, I'll PM you a contact you can reach out to.

Originally posted by @Chad Kastel :

@Jason Bott.  Thanks for the response.  This article helps.   A few follow up questions:

1. How do I determine which agents are NOT bound to a single provider?  Is this something I just ask directly?

2.  How do I determine how much insurance I need.  The quotes I'm getting are offering 1 million liability that has 2 million of total liability per year?    Is this industry standard?   How much insurance do I want?  Is this based on how much the property is worth?  Is this based on my net worth?  Am I supposed to get umbrella insurance?  All my quotes have also determine different values for the building.  None of them have included "loss of rent/business coverage"

I'm happy to read any and all articles.

 Chad, in regards to #1, ask if they are an Independent Agent.  If they say "no", they only rep for a single company.

For General Liability (GL), $1M/$2M is standard and I don't recommend going any lower to save $10 per year.  There are many ways to determine the right limt for yourself, but it's not an exact science.

If you determine you want more than $1M/$2M GL, then you would add an higher limits with an Umbrella.

Each company may have a different formula for Replacement Cost of the Building.  Id suggest determining your own Building value and then requesting that limit from each agent so your quotes are more easily comparable.

You definitely need Loss of Rents, which can also be called Business Income.

@Jason Bott

Thank you Jason.   The information you have provided me has been tangible and unbiased. It has sincerely helped me.  I will do my best to pass the information on as I read or talk to people who have similar questions.  I made the mistake of spending all my time learning how to analyze  and purchase a deal.  Of course I knew about insurance, but I didn't send time in advance on learning about concepts or nomenclature.

Originally posted by @Chad Kastel :

@Jason Bott

Thank you Jason.   The information you have provided me has been tangible and unbiased. It has sincerely helped me.  I will do my best to pass the information on as I read or talk to people who have similar questions.  I made the mistake of spending all my time learning how to analyze  and purchase a deal.  Of course I knew about insurance, but I didn't send time in advance on learning about concepts or nomenclature.

 Happy to help.  99.9% of investors are in the same situation as you are.

Your greatest return on your time will be finding the deal, so partner with a good agent, CPA and attorney and you'll be in good shape.