Why is LLC Investment property Insurance so High?

Why is LLC Investment property Insurance so High?

Investor · Pikesville, MD · Member since 2016 · 40 posts · 8 votes

In my name I have some investment properties which are from 4Bed/2Ba SFH to Duplex and all of them are rental property, the coverage is replacement value and the highest property insurance among these are $735. Now my investment property is expanding and I suppose to form LLC,and in last month I purchased the first investment property in the LLC name.Here is some details of the coverage, its dwelling- fire,extended,and liability in the same city with the other properties.What I can say is except premises liability,and vacant house, every thing else is almost the same coverage with the others.The new house is 3Bed/1Ba SFH. what wonders me is the insurance quote for the LLC Property that I got today,Guess what, the insurances quote that I received today is $1968.70.Since its a business i was expecting a bit higher than other properties but as you see it is way higher than the others.I wounder if you went though like this and what do you think, is this quote normal for LLC investment property insurance?.

0Reply
28 views

Most Popular Reply

Jason BottPro Member
Insurance Agent · Nationwide · Member since 2014 · 2k+ posts · 1k+ votes
6y
Originally posted by @Alex Get:

In my name I have some investment properties which are from 4Bed/2Ba SFH to Duplex and all of them are rental property, the coverage is replacement value and the highest property insurance among these are $735. Now my investment property is expanding and I suppose to form LLC,and in last month I purchased the first investment property in the LLC name.Here is some details of the coverage, its dwelling- fire,extended,and liability in the same city with the other properties.What I can say is except premises liability,and vacant house, every thing else is almost the same coverage with the others.The new house is 3Bed/1Ba SFH. what wonders me is the insurance quote for the LLC Property that I got today,Guess what, the insurances quote that I received today is $1968.70.Since its a business i was expecting a bit higher than other properties but as you see it is way higher than the others.I wounder if you went though like this and what do you think, is this quote normal for LLC investment property insurance?.

 Alex, a few comments.

1.  you say “what I can say is except premises Liability and Vacant house, everything else is the same”. Policies for Vacant buildings are 2-3x’s an occupied rental.  Ask your agent if you were quoted a Vacant building policy.  If so, you should be able to switch once the property is rented.

2.  Insurance companies that specialize in Home and Auto can handle a few properties, but are not competitive with commercial policies as that is not their target market.  

3.  Once you have 5-6 rentals, get some quotes for a commercial portfolio policy.  You may be surprised at the rates.  Also, you can have multiple entities on one policy as long as their is common ownership 

See this reply in the discussion

14 Replies

Jump to latestLatest
  • Austin, TX · Member since 2019 · 5k+ posts · 5k+ votes
    6y

    Hi Alex,

    Because the market will bear it.

    If the market would bear triple that price--that's what they would charge.

    Good Luck!

  • Julie MarquezPro Member
    Investor · Skagit County, WA · Member since 2016 · 1k+ posts · 807 votes
    6y

    I change my four plexes into LLCs and got new insurance and it was similarly priced. No idea why it changed for you.

  • Investor · Pikesville, MD · Member since 2016 · 40 posts · 8 votes
    6y

    @Julie Marquez, 
    The Same price? Its Impressive!!
    Does your insurance company operate in your local area  or nationwide? if you think they operate in East coast please PM me.

    Thank you

  • Julie MarquezPro Member
    Investor · Skagit County, WA · Member since 2016 · 1k+ posts · 807 votes
    6y

    The company is broker is local to Skagit County, Washington. It is with SafeCo insurance, I'm not sure if you have them on your coast, the Seattle Mariner's play at SafeCo Field (used to until t-mobile paid more for naming rights)

  • Investor · Pikesville, MD · Member since 2016 · 40 posts · 8 votes
    6y

    @Julie Marquez,
    Thank you for sharing me the information.I will find out about it during working ours.

  • Roanoke, VA · Member since 2014 · 404 posts · 203 votes
    6y

    @Alex Get shop around - Erie writes affordable coverage for LLCs... I’m sure other carriers do too.

  • Jason BottPro Member
    Insurance Agent · Nationwide · Member since 2014 · 2k+ posts · 1k+ votes
    6y
    Originally posted by @Alex Get:

    In my name I have some investment properties which are from 4Bed/2Ba SFH to Duplex and all of them are rental property, the coverage is replacement value and the highest property insurance among these are $735. Now my investment property is expanding and I suppose to form LLC,and in last month I purchased the first investment property in the LLC name.Here is some details of the coverage, its dwelling- fire,extended,and liability in the same city with the other properties.What I can say is except premises liability,and vacant house, every thing else is almost the same coverage with the others.The new house is 3Bed/1Ba SFH. what wonders me is the insurance quote for the LLC Property that I got today,Guess what, the insurances quote that I received today is $1968.70.Since its a business i was expecting a bit higher than other properties but as you see it is way higher than the others.I wounder if you went though like this and what do you think, is this quote normal for LLC investment property insurance?.

     Alex, a few comments.

    1.  you say “what I can say is except premises Liability and Vacant house, everything else is the same”. Policies for Vacant buildings are 2-3x’s an occupied rental.  Ask your agent if you were quoted a Vacant building policy.  If so, you should be able to switch once the property is rented.

    2.  Insurance companies that specialize in Home and Auto can handle a few properties, but are not competitive with commercial policies as that is not their target market.  

    3.  Once you have 5-6 rentals, get some quotes for a commercial portfolio policy.  You may be surprised at the rates.  Also, you can have multiple entities on one policy as long as their is common ownership 

  • Investor · Lebanon, PA · Member since 2016 · 62 posts · 65 votes
    6y

    Your house is vacant thats why, i ran into the same issue, once i rented the house , called insurance company and rate went down

  • Investor · Pikesville, MD · Member since 2016 · 40 posts · 8 votes
    6y

    @Matt Clark,
    Thank you for referring me Erie insurance and I will shop around.

  • Investor · Pikesville, MD · Member since 2016 · 40 posts · 8 votes
    6y

    @Jason Bott, 
    I guess it building policy,I will check with my agent.I have over 6 properties. Thank you so much for your portfolio policy suggestion,I will work on it ,i never know there is such a policy out there.

  • Investor · Pikesville, MD · Member since 2016 · 40 posts · 8 votes
    6y

    @Rafael Zavala,
    I suspect that would be one of the case.

    Thank you.

  • Professional · Parsippany, NJ · Member since 2013 · 384 posts · 262 votes
    6y
    Originally posted by @Julie Marquez:

    I change my four plexes into LLCs and got new insurance and it was similarly priced. No idea why it changed for you.

    Make sure it is landlord lessers risk insurance (commercial lines)

  • Investor · Austin, TX · Member since 2017 · 24 posts · 6 votes
    6y

    @Julie Marquez how is the process of changing ownership from personal to LLC? Thinking to do that for couple of my properties

    Thanks

  • Bjorn AhlbladPro Member
    Investor · Shelton, WA · Member since 2017 · 6k+ posts · 6k+ votes
    6y

    We have properties in our own names and others in LLC; not seeing a meaningful difference other than perhaps location. I make it a point to shop insurance regularly.

Join the conversationCreate a free account to reply, vote on answers and follow this thread.