Is my insurance premium too high?

17 Replies

I own a SFH (3Br 1.5 Bath-Ranch) rental in the Twin Cities of Minnesota. My Fire/Dwelling policy covers the rebuild cost of $193K, $2K in personal Property, and $100K liability (seperate $1M umbrella) for a yearly premium of $1750. It seems a little high but interested in what others are paying in Minneapolis/St. Paul area. Thanks!

I don't know about the area. But that sounds ludicrous. What are you getting for rent on the unit?

Hi Douglass!

From what you describe it does seem high.  That stated, there could be some factors that could make the cost higher depending upon the area the rental is located in or with some companies age is a big deal.  For some, the distance to the nearest fire station is also a big thing.  Your deductible might play a factor if it's very low one... 

You did mention having $2K of personal property coverage, which makes me wonder if you have a homeowner's policy covering a rental location.  Not sure what you would need the $2K in personal property for as your tenants should have renters insurance to cover their personal belongings.  

I could tell you more if I were to look at the declarations page, but it definitely sounds like you could use to have your coverages reviewed at least.  You may/may not have the correct type of coverage for your rental.

@Douglass Belt  @BreAnn Stephenson  @Gabe G.  I am in Texas and we have some of the highest costs for insurance.  I know as you might know, I am retired Allstate Agent after 28 years of service to my customers.   Well enough of the make me feel good today.  LOL 

I am sending my properties out for proposal to NREIG who I found here on Bigger Pockets. 

I will update as soon I can.  

this sounds like a home owners policy. 

Anyway. We just renewed our insurance policies. We have found that is getting more difficult to insure more than ten properties at a time, our last insurance provider Nautilas will only do ten or less rentals. After we signed for our new policies, the total for this year is just over $30,000. Wow. It seems like a lot, but that covers 48 SFR's, 48 multi units, and 2 commercial buildings. The highest single item was the liability on the commercial buildings($953.00 each). Our policies are stated value policies, averaging $40000 per door in coverage.

@Douglass Belt  

Way too high and it does sound like the wrong policy as you mention $100k in liability and "Persoanl Property" instead of "Business Personal Property"

thanks all for the feedback.  It is a landlord policy for sure not a homeowners policy. The money for personal property is for lawnmower and appliances that are mine and the tenant has a renter policy. I should have clarified that the liability was extended from my primary residence to my rental in addition to the umbrella. So in short it is dwelling and a little personal property. Hope that helps and sorry for the confusion. 

From the sound of it it still sounds high. Would love to hear from someone with rentals in MN thoughts. 

That makes sense, thanks for clarifying Douglass.  Definitely still sounds high to me.  There are programs that are national in scope that contemplate the neighborhood (i.e. compares Minneapolis with other Minneapolis locations) for the purpose of underwriting, but still should be less than what you are currently paying.  And for like, or better, coverages... 

What deductible do you have out of curiosity?

@Douglass Belt  I would definitely get another quote. I have rental property in the twin cities. I use Kyle Garman with Paragon Insurance Group. PM me for his contact information. He is quick to respond and great to work with. 

Cheers, Sawyer 

@Douglass Belt  I pay less than $1500 for my (4000 sq ft) duplex located in Shoreview, with $400k replacement, $1M liability, $2500 deductible. Yours is way high, in my opinion. Not sure what area your rental is in, but I don't think anything in the area should be that high.

Thanks all for your continued feedback-

@Dan B-that really put things into perspective regarding your rates on your property. I know investment property that insurance is a little more expensive overall but that is a pretty drastic difference.

@BreAnn Stevenson- Good ideas, and thank you! As for your questions, I have a $2500 deductable.

On a side note, how do I highlight your names in the response using the "@" symbol??? I consider myself computer literate but apparently I am getting too old now and am slipping behind the times....

@Douglass Belt

That is way too high, if it is a standard unit you should be paying around $85 a month.  If you need help getting another quote send me a personal message. if it is a town home it should be around $13 a month

I was having that same issue the other day but start typing the name and wait a little longer it should pop up

thanks @Juliana Shipp. I will keep trying.....!

I am an investor and also an insurance agent in Mn. If you would like I could review your coverages with you and let you know what I could do for you. MN is one of the highest states in regards to home insurance costs in the US. Most people don't realize this. We have wind, hail, tornados, and also freezing weather that brings all the other problems. Your premium does sound a little high depending where it is and prior claims, will make a difference. I work with a number of investors and have a few option when it comes to insuring rentals. One question I have is do you own the property personally or do you own it in a trust or LLC. I can write a rental policy and have the named insured be a LLC. I always endorse 1million in liability (unless they don't want it) again many different options in policies. Like do you have rent loss coverage, replacement cost or ACV, a lot of options in a home policy. Pm me if you would like to chat.

@Douglass Belt  

I can tell you on my personal residence, replacement value at about $250K, I pay about $1100.00 /year.  I'm with Farmers.  When I get the roof done, they've said they will cut if much lower (in the $600.00 range).

I have rentals in Southern MN, and I do cash value policies and pay about $400.00 apiece. 

@David Moore  

- Thanks David, that gives me a good idea and more input to go off of. Personally, I have had issues with Farmers, however I have some other contacts I can reach out to to ensure proper coverage with a fair price. Thanks again!

@Douglass Belt  I received the proposal from NREIG and it was okay but deductibles higher than I have 1% of dwelling value, and the rates comparable to mine.  I use Hochheim Prairie Ins, they are a mutual company in Texas.  Not sure if they are in your neighborhood.  

One way to tag is to enter @ followed by ?, and people who have responded will be at bottom of your post.  Or you can [email protected] followed by first few letters of person name(without space between @and name.  Wait a minute and their name will show at bottom of post.  Good Luck with Insurance.  

Create Lasting Wealth Through Real Estate

Join the millions of people achieving financial freedom through the power of real estate investing

Start here