Rental Property Investor · Knoxville, TN · Member since 2011 · 701 posts · 531 votes
I live in one side and rent the other, what is the best way to set-up my insurance? My agent is currently saying to push my homeowners insurance liability up to $500k and add a $1m umbrella. Is this the best set-up? I got a quote from National Real Estate Insurance group but the min. deductible is $3k, this seems really high for my situation.
Investor, Entrepreneur, Educator · Springfield, MO · Member since 2009 · 21k+ posts · 12k+ votes
14y
Your agent knows more about your situation than I do, I'd say 500K but 1mm would be better, not sure you need an umbrella policy in addition to the landlord/owner's policy, but each state is different. Yes, 3K is a little high, is that for the liability side or property damage, but a higher deductable will provide a lower premium too.
Rental Property Investor · Knoxville, TN · Member since 2011 · 701 posts · 531 votes
14y
Thank you for the reply Bill. The email stated $3k min. deductible and $7,500 for theft/damage. This just seems to be designed for owners of larger portfolios than my 1 duplex so I am going a different direction. I am currently with SafeCo and their max is $500k so I'll have to go with an umbrella to get $1m in liability.
Lender · Tyngsboro, MA · Member since 2009 · 3k+ posts · 2k+ votes
14y
Understand that insurance is designed to insure catastrophe, but has evolved to the point that we expect to be insured for leaky faucets (ok, I'm over exaggerating here)
The question to ask yourself is: would I have to put in a claim to replace damage caused by a falling tree or a broken washing machine hose if the damage was, say, $2500. (Clearing the tree, repairing the roof, or replacing flooring after the hose let go)
If the answer is yes, you are strapped enough to submit a claim for that, then yes, get a policy with a lower deductible. If you consider a $3000 repair simply the cost of doing business, then the higher deductible will save you premiums.
Investor, Entrepreneur, Educator · Springfield, MO · Member since 2009 · 21k+ posts · 12k+ votes
14y
While I like 1mm, since you live there and can see what happens, I doubt you'll have the risk exposures an offpremises landlord would have. Liability comes from your negligence, if you are not negligent you're not really repsonsible, so evaluate your risk amd 500K may do just fine. Ann makes a good point as well as to your ability to cover small property losses, it's part of property ownership. Good luck
Rental Property Investor · Knoxville, TN · Member since 2011 · 701 posts · 531 votes
14y
Thanks for the replies.
Yes, at this specific point in time a $3000 hit would hurt. My house has received over $15k in repairs this year from a new sewer line and lateral ($5400) to a new roof ($9400) and more. I covered the sewer line because I had 6+ months of cash reserves in my account but it basically wiped me out. I would not have been able to afford a $3k deductible on top of the sewer line at that point. Smaller deductible for me until I get on more solid footing again.
How often do you adjust your insurance based on these factors, annually?
Investor · El Dorado Hills, CA · Member since 2012 · 1k+ posts · 1k+ votes
14y
What state are you in? I may have some carrier suggestions.
Few quick pieces of advice... The deductible credit is basically worthless above $1000 on a small 2 unit dwelling. Quoted one today and the savings from a $1000 deductible to a $2500 deductible was $7. Most umbrellas will write over a $300k underlying limit so there is no need to go to $500k. An umbrella can be had for $135-250 per million with the right carriers. I really like Safeco but their umbrella rates are higher than most.
Rental Property Investor · Knoxville, TN · Member since 2011 · 701 posts · 531 votes
14y
Joe, I am in Knoxville, TN. My agent upped my liability on my homeowners to $500k for $22/yr and is working on a $1m umbrella quote. I'm actually looking for another insurance agent/company so if you happen to know anyone or the best carriers for my area I will be appreciate the tip.
Landlord · Dallas, TX · Member since 2011 · 63 posts · 7 votes
14y
Christopher I'm currently in the same situation in Tennessee too. I'm not having the deductible problem as much as them wanting an arm and a leg for premiums. Keep me posted with your findings!
Rental Property Investor · Knoxville, TN · Member since 2011 · 701 posts · 531 votes
14y
Michelle I will let you know what I get back from my agent. I feel like I am getting bent over by deductibles as well. I am paying $1300 right now for a $112,000 policy with $500k in liability. There has to be better rates out there. This will be an on-going search I feel.
Attorney · Raleigh, NC · Member since 2008 · 4k+ posts · 1k+ votes
14y
Originally posted by Christopher Bush:
Thanks for the replies.
Yes, at this specific point in time a $3000 hit would hurt. My house has received over $15k in repairs this year from a new sewer line and lateral ($5400) to a new roof ($9400) and more. I covered the sewer line because I had 6+ months of cash reserves in my account but it basically wiped me out. I would not have been able to afford a $3k deductible on top of the sewer line at that point. Smaller deductible for me until I get on more solid footing again.
How often do you adjust your insurance based on these factors, annually?
Heads up. Your sewer line probably wouldn't be covered anyway. Underground pipes typically don't have coverage.
Rental Property Investor · Knoxville, TN · Member since 2011 · 701 posts · 531 votes
14y
Joe: Thanks, I appreciate the help. I am a UT alum myself, Go Vols!
Tim: Thanks for the reply. However, I do know that sewer lines and laterals are not covered by insurance. I was merely using it as an example of how I've been hit financially by my unit this year and couldn't afford a large deductible for my roof in addition to what I have already paid out for the sewer. Luckily I keep a min. of 6 months expenses in my account so I had the reserves to cover it.