Getting Eaten Alive on Insurance Costs--Help!

Rental Property Investor · Valley View, TX · Member since 2018 · 174 posts · 87 votes

Hi All,

I own 4 SFHs each purchased in the last 7 months for approximately $85-$95K in the Wichita Falls market. Problem is, the insurance is a killer! Each property is running me around $1400-$1900 per year in premiums with a 1% deductible for RCV coverage. Even raising the deductible to 2% on each isn't much help. Am I just cheap, or does this seem excessive to you all?

I'm pretty sure this is a function mostly of the insurance companies' estimates for replacement costs. ($140-$165K on these properties.) I've shopped some different agencies, but not much luck getting lower premiums. Is this normal or does it strike you all as expensive?

Thanks.

2 Reply

85 views

Most Popular Reply

Trent Honea

Investor · Weatherford, TX · Member since 2015 · 43 posts · 40 votes

I had the same problem a few years ago. You'll find different agencies are better at helping investors than others. My suggestion (this is what I did): Put together a Request for Quote with the details on your properties, outline the coverage you need, send to as many area insurance agencies as possible, then compare the results. In my case, 10 of 12 agencies responded, and the highest, middle, and lowest prices were all with the same underwriter! I actually got a better deal by including my homeowners, auto, and an umbrella policy all with one company.

It's been a couple of years, and I'm still with the same agency and underwriter. I have a relative who is now an agent, and she keeps re-quoting my policies. The problem is the company she works for does not work well with investors and she can't get even close.

Happy Investing!

1 Reply

See this reply in the discussion

33 Replies

Jump to latestLatest

Sort by

Theresa HarrisPro Member
Member since 2019 · 15k+ posts · 11k+ votes
7y
The insurance for my rentals range from about $500 to 1100 depending on the type of house.
0 Reply
Alfred Litton
OP
Rental Property Investor · Valley View, TX · Member since 2018 · 174 posts · 87 votes
7y
@ Theresa Harris.Can I ask, are they in Wichita Falls and what are the values of the homes? Also, who's your agent? Thanks.
0 Reply
Khanesia Washington
Real Estate Agent · Arlington, TX · Member since 2017 · 107 posts · 60 votes
7y
Sounde about right to me. Are you leasing any of these properties?
0 Reply
Beau Fannon
Real Estate Agent · Austin, TX · Member since 2017 · 229 posts · 259 votes
7y
Originally posted by @Alfred Litton:

Hi All,
I own 4 SFHs
When were these homes built?
0 Reply
Theresa HarrisPro Member
Member since 2019 · 15k+ posts · 11k+ votes
7y
I'm in Canada and use a national insurance provider as most of my rentals are in another province.
0 Reply
Alfred Litton
OP
Rental Property Investor · Valley View, TX · Member since 2018 · 174 posts · 87 votes
7y
The homes were built in 1957, 1965, 1973, and 1980. They're all leased currently.
I've even looked into dropping down to ACV coverage from RCV, but that seems risky.
0 Reply
Bob B.
Investor · Jasper GA · Member since 2015 · 1k+ posts · 1k+ votes
7y
What is your deductible? I carry the max to reduce my premiums.
0 Reply
Alfred Litton
OP
Rental Property Investor · Valley View, TX · Member since 2018 · 174 posts · 87 votes
7y
Normally, I go to 2% deductible.
0 Reply
Trent Honea
Investor · Weatherford, TX · Member since 2015 · 43 posts · 40 votes
7y
I had the same problem a few years ago. You'll find different agencies are better at helping investors than others. My suggestion (this is what I did): Put together a Request for Quote with the details on your properties, outline the coverage you need, send to as many area insurance agencies as possible, then compare the results. In my case, 10 of 12 agencies responded, and the highest, middle, and lowest prices were all with the same underwriter! I actually got a better deal by including my homeowners, auto, and an umbrella policy all with one company.
It's been a couple of years, and I'm still with the same agency and underwriter. I have a relative who is now an agent, and she keeps re-quoting my policies. The problem is the company she works for does not work well with investors and she can't get even close.
Happy Investing!
1 Reply
Alfred Litton
OP
Rental Property Investor · Valley View, TX · Member since 2018 · 174 posts · 87 votes
7y
@Trent Honea Can I ask what company you eventually went with?
0 Reply
Beau Fannon
Real Estate Agent · Austin, TX · Member since 2017 · 229 posts · 259 votes
7y
Originally posted by @Alfred Litton:

The homes were built in 1957, 1965, 1973, and 1980. They're all leased currently.
Based on the age and purchase price, I'd say the insurance companies are expecting your houses to become total losses following fairly mundane claims. They don't have much salvage value and the cost to rebuild would be double the price you paid for them.
Based on the speed of your acquisitions, I'd bet you don't have much equity in the properties so the insurance company is on the hook to your lender first. That's a hard hook to shake.
You need to keep shopping around because you are probably sitting high on their risk analysis for potential payouts.
0 Reply
Jay HinrichsBusiness Member
Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
7y
Originally posted by @Theresa Harris:

I'm in Canada and use a national insurance provider as most of my rentals are in another province.
of course socialism at work just like health insurance. LOL
Podcast Guest on Show #222
JLH Capital Partners51 Review
Website View Page
0 Reply
Jay HinrichsBusiness Member
Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
7y
Originally posted by @Beau Fannon:

Originally posted by @Alfred Litton:
The homes were built in 1957, 1965, 1973, and 1980. They're all leased currently.
Based on the age and purchase price, I'd say the insurance companies are expecting your houses to become total losses following fairly mundane claims. They don't have much salvage value and the cost to rebuild would be double the price you paid for them.
Based on the speed of your acquisitions, I'd bet you don't have much equity in the properties so the insurance company is on the hook to your lender first. That's a hard hook to shake.
You need to keep shopping around because you are probably sitting high on their risk analysis for potential payouts.
wow thats a ton for insurance.. i know on my stuff i have 5k deductable.. not sure i would do that in hail and wind storm country .. but in most of our areas were we have no hail or real wind.. that works
Podcast Guest on Show #222
JLH Capital Partners51 Review
Website View Page
1 Reply
Theresa HarrisPro Member
Member since 2019 · 15k+ posts · 11k+ votes
7y
@Jay Hinrichs I wish =) My personal home insurance is much higher even though I've never had a claim. Don't even ask about car insurance. For my rental insurance, the amounts aren't even logical, the most expensive one is for the house that is worth the least amount!
0 Reply
Jay HinrichsBusiness Member
Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
7y
Originally posted by @Theresa Harris:

@Jay Hinrichs I wish =) My personal home insurance is much higher even though I've never had a claim. Don't even ask about car insurance. For my rental insurance, the amounts aren't even logical, the most expensive one is for the house that is worth the least amount!
maybe just carry liablity and bunch fire.
Podcast Guest on Show #222
JLH Capital Partners51 Review
Website View Page
0 Reply
Beau Fannon
Real Estate Agent · Austin, TX · Member since 2017 · 229 posts · 259 votes
7y
Originally posted by @Jay Hinrichs:
wow thats a ton for insurance.. i know on my stuff i have 5k deductable.. not sure i would do that in hail and wind storm country .. but in most of our areas were we have no hail or real wind.. that works
Jay, the insurance bill on my condo association is 50% trees. We've got 38 units on property and over 100 trees. I was pissed a couple of months ago when the association board voted to plant 20 mores trees cause that's going to hike our premium. Here in Texas we get all of the weather. New roofs from last year's hail storm. Hurricane Harvey took out 3 trees. Straight line winds took out 2 the year before. An ice storm 6-7 years ago took out half a dozen. Two look like they're dying now from the recent extreme temperature fluctuations. Trees and elderly housing stock is a surefire way to get increased insurance cost in Texas.
0 Reply
Trent Honea
Investor · Weatherford, TX · Member since 2015 · 43 posts · 40 votes
7y
Originally posted by @Alfred Litton:

@Trent Honea Can I ask what company you eventually went with?
I went with Ft Worth Insurance Co, Safeco is the carrier. A couple of units that were already low went up slightly, but the highest came way down. I had been with 5 different agencies and carriers prior to that. I saved significantly on my home and auto as well. I've had a couple of claims, one on a rental and hail on my primary residence roof, and no complaints.
I won't name any of the companies I left, but in one case they had a house in the city with a fire hydrant in the front yard, 5 blocks from the fire station, rated as high fire risk rural. Mistake on their part, but was very expensive until I got it corrected.
I sent the RFQ and received responses from Ft Worth Ins, two agencies affiliated with Goosehead (interestingly they came in 2nd and 4th lowest), Allstate, Farmers, State Farm, Al Boenker, GEICO, Tx Farm Bureau, and a few other local agencies, plus I think 3 or 4 that chose not to reply or provide a quote. Besides saving a few thousand dollars a year, the process was very informative. Especially since three different agencies quoted the "same" Safeco policies but came in at very different prices.
To show how much it can vary, on one property in Fort Worth, Ft Worth Ins quoted $591 and the highest quote was $1121 per year, almost double, and that was not unique - it happened with several. The three Safeco quotes (keep in mind these are exactly the same coverages, deductables, etc.) were 591, 1035 and 1051. My new agent at the time (he's since moved on to other opportunities) was willing to educate me and explained how that happens. Way too long for this post, but it was educational. Definitely shop and compare - you can save a bundle.
1 Reply
Jay HinrichsBusiness Member
Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
7y
Originally posted by @Beau Fannon:

Originally posted by @Jay Hinrichs:

wow thats a ton for insurance.. i know on my stuff i have 5k deductable.. not sure i would do that in hail and wind storm country .. but in most of our areas were we have no hail or real wind.. that works
Jay, the insurance bill on my condo association is 50% trees. We've got 38 units on property and over 100 trees. I was pissed a couple of months ago when the association board voted to plant 20 mores trees cause that's going to hike our premium. Here in Texas we get all of the weather. New roofs from last year's hail storm. Hurricane Harvey took out 3 trees. Straight line winds took out 2 the year before. An ice storm 6-7 years ago took out half a dozen. Two look like they're dying now from the recent extreme temperature fluctuations. Trees and elderly housing stock is a surefire way to get increased insurance cost in Texas.
wow never thought of trees in Oregon were we are at of course its timber country. so Tree's everywhere and big tall first trees hundred plus feet tall. I am surrounded by forest. Columbus day storm in 1962 devastated Portland region .. it was a pacific hurricane that made land fall Oct 12th 1962 and blew down millions of trees literally. just like Katrina wiped out 10 billion board feet of pine in Mississippi. just never heard of them affecting insurance rates. But you would know
Podcast Guest on Show #222
JLH Capital Partners51 Review
Website View Page
0 Reply
Alfred Litton
OP
Rental Property Investor · Valley View, TX · Member since 2018 · 174 posts · 87 votes
7y
@Beau Fannon Actually, I paid cash for the first three and am financing the fourth with 50% down, so equity's not a problem. For Wichita Falls, these homes' ages and conditions are, in fact, right near the median for that market.
0 Reply
Beau Fannon
Real Estate Agent · Austin, TX · Member since 2017 · 229 posts · 259 votes
7y
Alfred, your equity position is excellent. And it sounds like you know the Wichita Falls market very well.
But let me ask you, does your insurance company only insure homes in Wichita Falls? Or do they make the bulk of their money insuring new builds 90 minutes south of you in the DFW sprawl? Do you see how your portfolio might be drastically different than the insurance company's portfolio? That's why you need to keep shopping around until you find a company who has a lot of properties similar to yours. Otherwise, you are going to stick out like a tall nail. And you know what happens to the tallest nail. It gets hammered.
0 Reply
Josh James
Professional · Wichita Falls, TX · Member since 2012 · 124 posts · 70 votes
7y
For insurance on rentals in the Wichita Falls market, give Craig Cotton Insurance Agency a call. They underwrite through Lloyds, Columbia, and other cheaper insurers. It's a small shop, so you might not get someone right away. 538-6441
Hail claim "capitol" of Texas. Lol
0 Reply
Alfred Litton
OP
Rental Property Investor · Valley View, TX · Member since 2018 · 174 posts · 87 votes
7y
@Beau Fannon In fact, the insurance agent I'm dealing with insures my residence which is about 45 minutes north of Dallas and 90 minutes AWAY from WF. So they insure DFW properties AND rural ones. It's a Safeco policy, so those guys are all over the country as well. I checked with local WF agents, and they were even higher! What's also odd is that the homes are fairly similar and some are even a couple of blocks from each other but have wildly different quotes and premiums. It's kooky! I actually work in Denton and lived here for quite some time before moving out of town, so I'm familiar with the metroplex as well. I'm just not able to figure out why these rates are so high. I mean, they want $2000/year for a 1142 sf property that's a 3/2 all brick built in 1965. That's for 1% deductible RCV coverage. That's nuts! That's exactly what I pay for my 3800 sf home that's valued at $480K!!!
0 Reply
Alfred Litton
OP
Rental Property Investor · Valley View, TX · Member since 2018 · 174 posts · 87 votes
7y
@Josh James Thanks! I'll give him a ring. Does it sound like the rates I noted in my OP are high to you, since you're from WF?
0 Reply
Beau Fannon
Real Estate Agent · Austin, TX · Member since 2017 · 229 posts · 259 votes
7y
Dude, you are getting screwed.
1 Reply
Vivian Ji
Rental Property Investor · Houston, TX · Member since 2018 · 12 posts · 3 votes
7y
i am in houston,we always try get minimun deductble insurance meet for umbrella insurance. that might help you a bit
0 Reply

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