Is insurance REALLY this expensive?

Question

So I filled out an online form for a quote, and got quoted at about $800 a year for a property. Then I realized that was for if I was living there, and it's different since it's an investment property. When I called in they quoted me at $3,500!!

Is this right? Is there really this big of a gap between if you're living in the house or if you're renting it out?

Is this right? Is  there really this big of a gap between if you're living in the house or if you're renting it out?

Kevin Hart · Answer

@Zachary Schimenz I agree with what others have said. $3500 is insane. When I write a landlord policy for a customer its usually in the $600-900 range depending on part of town and value of property. it should always be less premium than an owner occupied homeowners policy since you are not insuring any personal property typically with a rental property.

Dennis M. · Answer

@Zachary Schimenz

Around here I find the rates to be about 80-100 dollars for every ten thousand the house is insured for and that’s with extra liability coverage . Most of my stuff comes in around 350ish per year

Sergio Altomare · Answer

@Zachary Schimenz as others have said, that quote is ridiculous. Call a high rated national company, like Nationwide or All-State. If you're going to be doing a lot of deals then find yourself a good insurance broker.

Jim K. · Answer

@Zachary Schimenz

Nope, you're getting soaked. It depends on the value, type, and condition of the property, but our experience lines up with @Kenneth Garrett's further west. $700 max per SFR worth under $200K.

Marc Winter · Answer

Actually, a landlord (fire & liability) policy should be less than an owner-occupied property policy.  Sounds kinda like a bait/switch--you filled out an online form, then got bumped up when you called in.  Keep checking around, you'll find something that will fit.

Kenneth Garrett · Answer

@Zachary Schimenz

I understand the convenience of clicking on line for quotes.  Too many variables that you don’t understand.  I typically pay between $500-600 for my SFH rental properties.  It is less expensive per unit with multiple units.  I use mostly State Farm.  There are many good companies out there.  I would caution you on finding the cheapest company and rate.  When it comes to claims the larger companies have the man power to respond quickly.  At one time I was an inspector for a city and a tornado hit.  The little companies know one heard of took weeks to come out.  The All States, State Farm, Country Companies, Farmers, etc responded quickly the others were in a world of hurt.

Just my perspective.

Zachary Schimenz · Answer

Ok gotcha, thanks for the replies. Yea mine is a duplex, but it's only $110,000  so I think I'll  reach out to other insurance companies. Thanks a lot for the input!

Ossie Moore · Answer

I too am paying about $700 per property under $200k.  Beyond the price, I have been extremely pleased with State Farm.  They are very good to work with if something does go wrong .

Pamela Morrison · Answer

@Zachary Schimenz State Farm gave me the best rates AND the best policy for the money, and I shopped around.

Chris Mason · Answer

Find a local independent insurance broker.

I had my guy offer a 2nd opinion on a refi client that was paying $1200/yr for $12,600 in flood insurance coverage last week.

He came in at $825/yr and $250,000 in coverage. It was a tough to insure property, so the carrier ended up being Lloyds of London.

1/3 off for 20x the coverage...

Insurance brokers don't have a rate advantage, meaning ABC Carrier's rate is ABC Carrier's rate no matter if you go through a broker or call them directly, assuming you are comparing apples to apples and no one is upselling extra stuff. But they still get to shop the market, and aren't captive vendors to just one carrier's rates/policies/etc.

Why I have a vested interest: If you go broke due to an insurance claim and having insufficient coverage, you probably can't take out any more mortgages.... cuz you're broke! Or, more commonly, if you are over-paying for insurance, that can screw with my DTI math. So I want my clients well covered and without overpaying.

Is insurance REALLY this expensive?

Most Popular Reply