How do I estimate insurance costs?

Question

How do you estimate insurance costs when your analyze a potential rental deal? I am beginning to analyze deals daily (and in different markets around the country) and I'm not sure how to come up with a good estimate for monthly or annual insurance costs? Any rule of thumbs that I should know about or websites/resources to utilize to come up with a rough estimate for my initial analysis?

Thanks!

Conor Davis · Answer

I certainly agree with Cameron. Getting with a broker will allow you to get shopped around the market. Your broker will provide you with an array of options from the most competitive carriers. All of this leading to multiple quotes should be free and then you'll have a great estimate on costs. If you want to be extra average all the quotes for the best estimate.

Cameron Moore · Answer

Hire an insurance broker that you can have an efficient relationship with. For example, I have investors that will text me 2-3 properties they are looking at and I will shop the market and see how each will effect the cash flow. Then they will have a quote in hand for each one and all they need to do is send a "bind it" text when they decide.

Bruce Woodruff · Answer

As @Samuel Hudacek said, there are waaaay too many variables to consider. The prices will even vary by neighborhood. Once you learn an area, you should be able to guess pretty closely, but as for 'around the country' that is almost impossible IMO....

Sam Hudacek · Answer

Hi Robert,

The most accurate way to estimate insurance cost would be to call different insurance companies and get quotes. Unfortunately there is so many different aspects to insurance that would impact the cost.

Things like the state, location, size, type of property, whether its owner occupied or not, type of rental etc all impact the cost of the insurance.

You could also research the average insurance cost for your area and find some numbers or network and ask other investors in the are what they are paying for insurance, just make sure its in the same area and a similar property. But like i mentioned above, i think insurance quotes will be your best bet!

Hope this helps!

How do I estimate insurance costs?

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