Insurance Shock on My Philly 3-Unit – Who’s Getting the Best Rates?

Question

Hey everyone,

I’m under contract on a 4-unit in Philadelphia (7345 Limekiln Pike) and just got my insurance quotes back. I was expecting around $2,500/year, but the quotes I’m getting are closer to $3,400–$5,800 depending on the carrier.

Property details:

• 3-unit (landlord policy)
• Older construction
• Around $280K coverage
• $5K deductible
• Seems like there’s a pretty big multi-unit surcharge baked in

It’s not a deal breaker, but it definitely changes how I’m thinking about underwriting going forward.

For those investing in Philly or similar markets:

• What are you actually paying for 2–4 unit properties?
• Which carriers or brokers have you had the best results with?
• Any companies that consistently come in cheaper?
• Have higher deductibles or bundling made a noticeable difference for you?

If you’ve recently gotten a solid insurance rate in Philly, I’d really appreciate if you could share the company or broker and a rough annual premium. Trying to build a short list of good options as I scale.

Appreciate any insight — especially from people actively buying right now.

Stuart Udis · Answer

Just an FYI very common for carriers such as State Farm to require inspections after policy is issued followed by a list of corrective measures. Chasing the cheapest policies is ill advised. Sometimes the least expensive policies are actually more costly to keep active.  Your deductible seems quite high for this neighborhood as well. High likelihood of non-fault claims that won't increase your premium but doesn't make sense to pursue in this price point real estate.

Charles Lundquist · Answer

Just an update - got quotes from 4 companies. Sent the best one to the other three. State Farm came down from 4k to 2522. 670k rebuild, 1m liability, 2% deductible.

Alan Asriants · Answer

Charles congrats on getting under contract. From my personal experience policies start to get much more expensive once you have more than 2 units. Duplexes are still treated like residential but 3units+ get treated like commercial on the insurance side.

Statefarm didnt even want to insure me. Also the age of the property will make a difference. The home you are buying is built in 1930 so that could play a role.

Try SafeCo - they gave decent rate for insurance for my triplex.

Jared Townsend · Answer

Not sure where you got your info because all of the carriers I've worked with in the last 15 years have considered 1-4 units as residential and 5+ as commercial.

Stuart Udis · Answer

Insurance pricing reset across the board and the rise in construction cost is a key contributor as it directly relates to replacement cost. The pricing you received seems consistent with the market. Keep in mind the real estate you are purchasing is disproportionately impacted by replacement costs. You can't build a 4 unit building in Philadelphia for $280,000. Then layer in the vintage of the building and I am fairly confident there's no sprinkler system, fire rated unit separation and a host of other improvements that carriers look for in their total loss analysis. Beyond that, you are buying real estate in Philadelphia, and GL coverage is more expensive due to litigation risk.

The real estate that's been less impacted in Philadelphia is real estate that's newer vintage that possesses sprinkler systems and other fire protection improvements adopted by the current code requirements and more generally real estate that holds values more aligned with today's replacement cost of construction.  Furthermore, GL coverage is easier to absorb. To provide greater context I own a 6,000 SF 2023 Vintage 4 Unit building in Philadelphia that has a similar insurance premium to what you were quoted but is detached and is fully sprinklered. The appraised value is approximately 7X the building you are buying.  Meanwhile I am paying $5,200 for a 4 unit mixed use building that's 125+ years old, fully renovated (no sprinkler) but is a stone structure and the replacement cost impacts my premium. The commercial adds to the GL portion of the premium as well.

Tony Wilcox · Answer

Charles, I have been noticing about $1200 per door, so that seems to fit on the lower side of the scale you sent. This all depends on roof age, type of coverage, and deductible. Most of my clients with multi-family homes go with at least a $5,000 deductible to save on insurance premiums. Sent you a message if you would like to discuss further.