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.

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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!

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Josh James
Professional · Wichita Falls, TX · Member since 2012 · 124 posts · 70 votes
7y
Yes @Alfred Litton, I pay that on my flips, which are twice or more the size of yours, and vacant.
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Marc Tuckey
Flipper/Rehabber · Flower Mound, TX · Member since 2013 · 66 posts · 22 votes
7y
Brooks Cannon Allstate is who I have been using. I would be interested in where you end up on this.
Erin Stubbs Pierce
Brooks Cannon Allstate Insurance Agency
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Justin Kane
Specialist · San Antonio, TX · Member since 2015 · 909 posts · 297 votes
7y
look imma be a lil harsh here.. you shouldve accounted for inflation or increased premiums when you made your initial purchase.. its called proper underwriting. with that being said. some lenders allow for up to 5% ded and you should review your policy to make sure there are no junk coverage. also look at your market if we are at the top perhaps you should consider selling and 1031 your funds into an apartment deal as a passive investor
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Kyle MccawBusiness Member
Property Manager · Keller, TX · Member since 2011 · 1k+ posts · 1k+ votes
7y
I have been reading through these posts and it seems many of yall have indiviual policies. It makes sense to get a commercial polocy as soon as possible for the best pricing and ease of keeping up with the policies. In addition, mine are flexible when including rehab properties without going to get a builders risk.
McCaw Property Management4.4902 Reviews
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Alfred Litton
OP
Rental Property Investor · Valley View, TX · Member since 2018 · 174 posts · 87 votes
7y
@Justin Kane Well, that IS a little harsh given that we don't owe money on the properties and given that the valuations were well above the "1% Rule" and given that all the properties are in excellent shape and given that we shopped the market fairly thoroughly prior to purchase and could not get lower premiums at that time. :) Sorry, but we really did do our homework and due diligence. It's just that, it appears to us that WF is a crazy insurance market. We still clear good money on each property. I'm just trying to figure out why the insurance part of the equation is so nutty.
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Ronald RohdePro Member
Attorney · Dallas, TX · Member since 2016 · 5k+ posts · 2k+ votes
7y
Originally posted by @Alfred Litton:

@Justin Kane Well, that IS a little harsh given that we don't owe money on the properties and given that the valuations were well above the "1% Rule" and given that all the properties are in excellent shape and given that we shopped the market fairly thoroughly prior to purchase and could not get lower premiums at that time. :) Sorry, but we really did do our homework and due diligence. It's just that, it appears to us that WF is a crazy insurance market. We still clear good money on each property. I'm just trying to figure out why the insurance part of the equation is so nutty.
Self insure an option? You have enough to spread the risk.
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Alfred Litton
OP
Rental Property Investor · Valley View, TX · Member since 2018 · 174 posts · 87 votes
7y
@Ronald Rohde Well, almost. We thought of that, but I've got two kiddos about to enter college and I'm getting closer to retirement. In a few years, I think that might well be an option though. Someone recommended NREIG, and I got quotes from them last night, and they have MUCH better premiums and coverage. I think the lesson I'm learning in all this is that it's best to try to find an insurance agency that really specializes in underwriting coverage for investors. Most of the agents I've encountered really don't do much of that business, so they don't have the right product for someone who's trying to make the numbers work as a business. It's all fine and well to pay a smidge too much for your own home's policy, but when you are insuring 3, 4, 5 or more, it starts to add up, and you need to find someone who works with investors.
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Justin Kane
Specialist · San Antonio, TX · Member since 2015 · 909 posts · 297 votes
7y
I dont know if State Auto services your area, but ive personally had luck with them for their extremely simplified and low rates on home policies
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