Anyone purchase commercial insurance on SFH?

Question

My insurance agent had very competitive rates for my first 7 rental properties but nationwide wont do any additional properties. Because I want to continue to grow this business he suggested that I get commercial coverage on all 8 properties and continue with commercial plans for future purchases.

I was paying around 5K for all 7 properties with residential insurance. With commercial I am closer to  $6500 but it has a lot more coverage built in.

Is this a good route to take? OR should I just keep the 7 residential policies in place with lower rates and just do commercial for future purchases?

Jason Bott · Answer

@Adam Craig

If the coverages are the same and your commercial Liability Umbrella can go over the personally owned properties, then I do not see a reason not to keep the 7 on your personal property for now.

Most personal insurance companies max out on rentals before 7, so if you continue to grow, you will need to incorporate a commercial policy one way or another.

Lastely, It is possible your current agent does not have access to additional commercial options that could be more competitive on the pricing.  Send me a PM if you want a list of all the commercial options in OH.

Good Luck!

Arlan Potter · Answer

we just got a bid for 32 unit (8 quads). 9940.00 stated value commercial policy.

We insure almost 50 single family homes for about 12000

The real issue is how much you are self insuring. The chances of a claim are very low. We don't use replacement cost, but just a stated value.

Commercial, stated value is the only way to go, unless you want to insure against all possible losses. And that is expensive.

Steve L. · Answer

American Modern insurance does a 10+ program that is really good and really cheap.  Usually it pencils out when you have 4-5 properties.

Jeremy Tillotson · Answer

@Adam Craig commercial is usually better, even better yet if you can get a combined deductible limit so if a tornado hits town you don't have 8 deductibles. Usually you can get a rider in case u get a property in a hurry so new properties are automatically covered as well.