Scaling Insurance as I Scale my Rentals

[Matthew Rensel]

I am starting to scale, under contract for my 5th investment property currently across 3 states (CO, TX, and OR) and would like to add 6 more next year. It seems like I am outgrowing my "traditional" insurance options. Would anyone have any suggestions on companies or agents that can help me out and possibly do portfolio insurance across all the locations? I already made a initial inquiry with NREIG.

Past that I know I need physical insurance and liability at a minimum. What are peoples opinions around if rent replacement, etc are worth the added expense?

[John Mocker]

Matthew,

I can think of two possible paths for your Insurance going forward:

1. A commercial policy with an Insurance Carriers that writes in the states your properties are located.  Think of the big name carriers such as Travelers, Hartford, Liberty, etc.

2. Look for an Independent Agent that is licensed in the states where the properties are.  They could do a commercial policy or multiple policies with different carriers on the various properties.

A single Commercial policy will probably involve less paperwork on your part.  Traditionally I've found that policies on each property can be less expensive.  Other factors that will influence your decision could be, are any properties more than 4 units., are any in poor condition, any coastal or windstorm issues, fire protection of the locations, etc.

I believe Loss of Rents is an important coverage.  In a total loss, you are likely to lose a years income from that property.  In many better Dwelling Fire policies they build in automatic coverage (10-20% of the building limit).   If possible, Replacement cost coverage for the Building, is a good option.  Even in a partial loss, have the coverage based on replacement cost can lead to a bigger payout (no deduction for depreciation).