I'm currently under contract for a $125K duplex in Indianapolis. I estimated homeowners insurance to come back around $90/mo, and I've received two quotes back so far. The first quote came in at $1,880/year and the second quote came back at $2,100/year.
I am an out of state investor (living in Colorado). Could this be why the premium is so high? What am I missing? I get that it's two units with two tenants, but the house is $125K. The insurance is destroying my COC ROI.
I know it's difficult to tell without all the details. I have great credit, and no claims filed in the past 5 years.
I recommend contacting @Jason Bott , an Independent Agent who works that area and can help you find coverage that might be more affordable.
I doubt it would be due to you being an out of state investor. It could be due to location perhaps? For example if you buy properties in certain areas of SoCal you may be charged a premium to due Fire Risk if you are too close to brush areas. I would also compare those two quotes to check for any coverages that you can cut on or that seem out of norm from the others. Company A rating you at $100k coverage compared to Company B at $175k.
Those are just some thoughts on the situation, Call a few more agents and maybe even show them one of the quotes you received. See if they are able to get a policy that is closer to your price range
Thanks for the recommendation @jaredn20
Great advice @SoCal_Gabriel! I appreciate the additional info and for pointing me in the right direction. One insurance provider told me it was because the property was located in Indianapolis. The home is not in a flood plain and it is located in the Emerson Heights neighborhood. It is an older home (1926), so maybe that's why?
Thank you @PrestonW11. I sent you a connection request.
@Seth Wilcock I live in Indy, the Emerson Heights area while an up and coming area, isn't Class A heavy, mid B and C's. As such the insurance premium I would imagine may be due in part to your property age and location.
Yeah Age of dwelling can be a factor but its still under 100 years old. Carriers have their sweet spots. I have a carrier that their sweet spot for rentals is 1970s and newer. Anything over 50 years old they require documented proof of renovations for things like roof, hvac, wiring, and plumbing. They are the only carrier that requires this that i write with. So different carriers can cater towards different risks.