How do you estimate insurance for rental property?

Question

I'm wondering if there's a rule of thumb on estimating the cost of insurance for the initial deal analysis. I'm looking at triplexes and quadruplexes right now. But I'm also curious how you figure insurance for larger apartment buildings. Any help on any of that? Thanks!

Kenny Dahill · Answer

Reach out to an insurance who specializes in the asset class you’re looking for. There’s a lot of different scenarios but I’m sure they can provide you a ballpark figure.

Jason Bott · Answer

I would second @John Mocker comments, you really need to connect with an agent to get some baseline pricing.  Once you have that #, you are at least in the ballpark on pricing.

Crime Score can have a large effect on pricing, and there is no way to know how each insurance carriers system will rate a specific area.

John Mocker · Answer

Matt,

My advise is to seek referrals to Independent Insurance Agents (represent multiple properties).  If you plan on looking at 5+ unit bldgs also, look for an agent that handled both Personal and Commercial properties.  Make sure they are licensed in the states you plan on investing.

I've found that the best policies on the 1-4 family rentals will vary from location to location.  Factors such as Fire protection in the town, condition of the building, limits needed, loss history of the property, etc. will impact who provides the best coverage/price for a rental building.

If you give the agent an example of the properties you will be bidding on, they should be able to give you a ballpark quote.  Remember to let the agent know the details of the deal (ie. will it be a fix & flip, buy & hold, fix and resale,...) so you get quotes for the proper coverage

How do you estimate insurance for rental property?

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