Outrageous Insurance Rates on Investment Properties

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Outrageous Insurance Rates on Investment Properties

Christopher J Lemmon
Investor · Little Rock, IA · Member since 2015 · 136 posts · 72 votes

Does anyone have any suggestions on finding a decent price for insurance on investment properties. 

I am trying to price in insurance in Kansas City, KS. Granted its not a high value area. But insurance rates are running me $2500-3000 on rental properties. Does anyone have suggestions on specialty agents for insurance properties? -- Chris 

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Jason BottPro Member
Insurance Agent · Nationwide · Member since 2014 · 2k+ posts · 1k+ votes
9y

@Christopher J Lemmon It sounds like you need to add a different insurance broker to the mix.  Most new investors do not realize that not every agent has access to the same insurance companies. 

I have quoted several portfolios in Kansas City and just do not have a competitive insurance carrier to offer.  Then again, I am not licensed  with Shelter or USAA.

Find an independent that offers the companies listed above and one that is larger than a 1 person agency.  They will have those options and probably several others.

. 

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  • Russell BrazilBusiness Member
    Moderator
    Real Estate Agent · Washington, D.C. · Member since 2012 · 17k+ posts · 30k+ votes
    9y

    Is the high rate on several different properties or one single property? If the high rate is on one individual property, and multiple insurance brokers are all quoting you a high rate then the CLUE report on the house may not be clean.

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  • Kel Cook
    Investor · Kansas City, KS · Member since 2016 · 2 posts · 0 votes
    9y

    insurance rates are higher than average in KCK. 2500 seems high though.  I use Liberty mutual and foremost and do not pay that much.  I also have reduced my coverage a little from what they quote me on replacement value. 

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  • Jason Fike
    Investor · Mission, KS · Member since 2016 · 42 posts · 22 votes
    9y

    I'm in KCK. My rentals are in KCMO. I ran into this issue. Then I ran across Shelter Insurance. Great deals. Around $300 a year for a landlord policy. You will pay a lot more if the property has asbestos siding...many of the older houses do have asbestos. One of my houses has asbestos and it's roughly $900 for the year. Call them and ask them about the landlord policies.

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  • Thomas Skuba
    Title Representative · Bristol, RI · Member since 2016 · 11 posts · 4 votes
    9y
    I got a quote the other day from USAA for rental property insurance. I thought their rates were good compared to my current insurance company.
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  • Christopher J Lemmon
    OP
    Investor · Little Rock, IA · Member since 2015 · 136 posts · 72 votes
    9y

    Thanks for the responses. I am going to check out Foremost, Liberty Mutual, and Shelter. Another question:  Is a Landlord policy different from a non owner occupied or investment property policy. I explained the scenario to my insurance agent and then she comes back with this ridiculous number. I am not sure if I am asking for the right thing.  Thanks again for the responses. 

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  • Jason Fike
    Investor · Mission, KS · Member since 2016 · 42 posts · 22 votes
    9y

    Yea there are differences in landlord policies and home owners. Home owners might cover things like theft, Coverage for furniture and personal items. Perhaps even cover your auto being burglarized if it's on the property. Landlord policy wouldn't cover stuff like this. My policy doesn't cover appliances either. And your deductible are generally higher with landlord policy. It will cover stuff like vandalism and new roof but it takes into account the depreciation. It's going to cover fire and debris removal. 

    Mine doesn't cover anything water related...Like flooding or pipe busting.

    I had the same issues you're having...outrageous quotes. Finally discovered Shelter.

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  • Charles Worth
    Investor · New York City, NY · Member since 2015 · 808 posts · 417 votes
    9y

    @Christopher J Lemmon

    Did you get a quote for replacement value or market value, what kind of deductibles are you looking at? What is not covered and what is covered? Its risk based pricing so a lot varies by what is covered and what you are willing to self insure. Also, I tend to stay away from the major nationals, this is really not their business and as such their pricing tends to be way off at least it was for me. It sounds like you just need to keep shopping. I used Shelter (mentioned by someone else too) and got decent rates once and then bad rates the other 2 times. As I said shopping is key. 

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  • Christopher J Lemmon
    OP
    Investor · Little Rock, IA · Member since 2015 · 136 posts · 72 votes
    9y

    Replacement value won't work in my area. I am looking at "C" grade rentals in the least desirable part of Kansas City, KS. Cheap houses but places that are still rentable. I asked for cash value policies to payoff the mortgage in the event of a disaster. I will keep shopping obviously. I get that it is risk based pricing. But even with me asking the agent to move the needle of risk as far as she can in my direction, its still pricing the property out of sight. I will definitely keep looking. Shelter might be a possibility. 

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  • Jason BottPro Member
    Insurance Agent · Nationwide · Member since 2014 · 2k+ posts · 1k+ votes
    9y

    @Christopher J Lemmon It sounds like you need to add a different insurance broker to the mix.  Most new investors do not realize that not every agent has access to the same insurance companies. 

    I have quoted several portfolios in Kansas City and just do not have a competitive insurance carrier to offer.  Then again, I am not licensed  with Shelter or USAA.

    Find an independent that offers the companies listed above and one that is larger than a 1 person agency.  They will have those options and probably several others.

    . 

    1Reply
  • Account Closed
    Real Estate Investor · Kansas City, MO · Member since 2015 · 222 posts · 121 votes
    9y

    REI Guard

    1Reply
  • Andrew SyriosPro Member
    Moderator
    Residential Real Estate Investor · Kansas City, MO · Member since 2014 · 10k+ posts · 5k+ votes
    9y

    REI Guard (used to be Affinity) is really reasonably priced, although I've heard complaints about their coverage (I haven't had any issues though). You should also check out Farm Bureau, who we've had luck with as well.

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  • Charles Worth
    Investor · New York City, NY · Member since 2015 · 808 posts · 417 votes
    9y

    @Christopher J Lemmon

    Oh that may explain it as well. I have had risk based pricing on policies by area which could swing the rate by $500 depending on the zip code.  

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  • Account Closed
    Investor · Singapore · Member since 2013 · 1k+ posts · 3k+ votes
    9y

    I got tired of being screwed by constantly rising rates and declining coverage. I finally switched to a commercial insurer and its night and day. I think residential insurers just hate landlord policies and try to avoid them or price them so high they make a ton of money

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  • Christopher J Lemmon
    OP
    Investor · Little Rock, IA · Member since 2015 · 136 posts · 72 votes
    9y

    Thanks for the responses everyone. Rei Guard is who I am with. They dropped my premiums down quite a bit. They seem to be a good fit for investors. 

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