My wife inherited four rental structures (two fourplex units, one threplex, and one single family home) from her mother. Her mother was a shrewd investor, but really did not spend a lot of funds on capital maintenance, which my wife have spent a lot of 2019 paying for (installing new roofs, new water heaters, etc) stuff that was original for the units (that were largely purchased or built in the late 1980s).
I am taking over some of the property management of these units, and one issue I need help on is insurance policies for these buildings. My mother-in-law had three separate policies on these various units; one on the threeplex, one covering the fourplexes, and one for the single family home. My gut tells me that there could be some cost savings on having all the buildings insured under the same policy, but I'm unsure what I would need a policy to cover? The three existing policies cover different levels of coverage and have different deductibles. Can folks advise me on 1) what needs to be covered, and 2) what sort of deductible level we should go with? None of the properties have mortgages and are all rented fully.
Thank you all! Peter
I would check with an insurance broker who can shop for the best insurance policy/ies for your situation.
@Peter A Bratt a few comments/questions
1) Did your wife rewrite the same policies with the same provider or are they still in grandma's name?
2) There could be price savings in combining all onto a single policy. If you were somehow able to keep the rates your wife's grandmother had, those might have been tough to beat.
3) The coverage and deductible you choose should be determined by how much risk you want keep and how much you want to pass on to the insurance carrier. That is going to be different for each investor. Given you don't own much, you have the freedom to take on a lot more risk, but being new, you may want to be more conservative.
You can use 1 company but get 3 policies. If they are worth more than a couple hundred thousand each I would get a million umbrella, 300k liability insurance with a 2500 or 5000 deductible.
If they are cheaper properties adjust accordingly.
Ps. Make sure they are landlord policies not home owner policies. And if they are paid off that none of the old mortgage companies are still listed as beneficiaries.
Generally individual policies are going to be the way to go, It depends on where the properties are as to what you need, example: California doesn't need wind and hail coverage most of the time. You will need liability and fire insurance though no matter where you are.
Thanks everyone! I've made some inquiries to some insurance brokers to see what they might be able to drum up. Thanks again. PB