I am looking to purchase a 3 Family, 9 Bedroom Triple Decker in the city of New Bedford Massachusetts for around $310,000. The numbers look solid but I decided to get actual Landlord Insurance quotes to confirm my estimates and got a staggeringly high premium quotes from each and every insurance company I contacted (Liberty, American Modern, Allstate etc). So high that it's pushing the numbers of the deal into No Go territory....They are all coming back with DP-3 policies in the neighborhood of $7,000. RCV ranges between the policies are $650,000 - $750,000. 

I know this is a rough neighborhood, but this seems absolutely unbelievable. I've Tried to get quotes for ACV (Agreed/Actual Cost Value) but have so far not found anyone willing to write that policy. They say to keep asking around but offer no guidance. Can someone chime in as to whether or not this seems like a normal premium price for the area? Has anyone had success getting an ACV policy in this part of Massachusetts? If I do find an insurer willing to do ACV, is the move to document all systems and agree that they are within 5 years old (they are) as I understand ACV has depreciation implications when dealing with a partial loss and set the ACV to around $350,000? Anything I'm missing here? Thanks so much. I've been a lurker for a long time, but finally just jumped in. Ryan

I don't really know what ACV is.  I don't ensure for replacement cost I ensure for around my purchase price.  Is that what ACV is?

That might be bc of crime rates in the area but you'll have to confirm your replacement rates with them and other details of the property. Something like that should be no more than $3500 max for coverage rate with a $1000 deductible. 

I would recommend going with someone local who knows the area well and knows the property to get a good rate. They have a local presence and will give you better feedback on your policy and what changes they would recommend. 

That seems crazy high. I pay less for a $650k 8 unit in FL. I’ve never heard of replacement costs being double the purchase price. Is this a Mass specific thing? Try a local broker who can pull multiple quotes from different companies.

I am a commercial insurance agent and have clients all over the country. It is hard to give you a definitive answer without knowing more details on the property (square footage, construction type, etc.) but that does seem high. I would recommend reaching out to a local agent and asking for a quote from an excess & surplus carrier. I won't bore you with all the insurance jargon but those carriers file their rates differently. This gives them the ability to quote Actual Cash Value and be a little more aggressive on the rate. Carrier would be someone like Lloyd's of London. 

@Ryan M.

Definitely get some quotes for commercial insurance. Typical I would expect commercial to be higher, but in your case it just may be cheaper. Good luck.

Hi Ryan, 

I used Humphrey, Covill & Company in New Bedford on Kempton St for a single family flip in NB. Although, your looking for a 3 family quote it might be worth your while calling them. Great service &  price  and they use Llyod's of London as one of their carriers. I'm currently looking for a a multi in the area and I will call them again. Best of luck !!

John 

@Ryan M. I currently own (2) 4 unit non-owner occupied properties in New Bedford, on even has an additional bank of 7 detached garages in the rear. My premiums aren't even half of that. I use FB Insure as an agency, a little slow on the ball sometimes and need to keep on them, but they haven't failed me yet.They utilize Lloyd's of London as well. Let me know how you make out!

Originally posted by @John Silva :

I used Humphrey, Covill & Company in New Bedford on Kempton St for a single family flip in NB. Although, your looking for a 3 family quote it might be worth your while calling them. Great service &  price  and they use Llyod's of London as one of their carriers. I'm currently looking for a a multi in the area and I will call them again. Best of luck !!

Thanks for the information John, I will definitely give them a call. Since I originally posted I had an ACV DP-3 quote come back from Flagship that was $2200 but was at 80% co-insurance which I thought was also pretty bad considering it's ACV, but time will tell as I have a few more quotes coming in combined with the company you just gave me. I'll keep everyone posted. Apparently the biggest issues are age of properties in the area, and the fact that almost all of them are using gas space heaters in the units. 

Originally posted by @Lien Vuong :

That might be bc of crime rates in the area but you'll have to confirm your replacement rates with them and other details of the property. Something like that should be no more than $3500 max for coverage rate with a $1000 deductible. 

I would recommend going with someone local who knows the area well and knows the property to get a good rate. They have a local presence and will give you better feedback on your policy and what changes they would recommend. 

 That's good advice Lien, I've started to communicate with local agencies and am starting to make some headway, but so far no reasonable quotes in my opinion. 

Originally posted by @Ian Shinnick :

I am a commercial insurance agent and have clients all over the country. It is hard to give you a definitive answer without knowing more details on the property (square footage, construction type, etc.) but that does seem high. I would recommend reaching out to a local agent and asking for a quote from an excess & surplus carrier. I won't bore you with all the insurance jargon but those carriers file their rates differently. This gives them the ability to quote Actual Cash Value and be a little more aggressive on the rate. Carrier would be someone like Lloyd's of London. 

 Thanks for the info Ian. I hadn't heard of an "excess & surplus carrier" before, but it seems like a solid idea. Thanks for your help. 

Originally posted by @Nicholas Davila :

@Ryan M. I currently own (2) 4 unit non-owner occupied properties in New Bedford, on even has an additional bank of 7 detached garages in the rear. My premiums aren't even half of that. I use FB Insure as an agency, a little slow on the ball sometimes and need to keep on them, but they haven't failed me yet.They utilize Lloyd's of London as well. Let me know how you make out!

 Thanks for the info Nicholas! I wonder if it's something specific to the property I am looking at (built in 1909, has space heaters etc) . Do you happen to know if your 4 unit properties are insured as Replacement value or Actual Cash Value, and if so for how much. Just want to try to compare apples to apples. Thanks!

Originally posted by @Marcello Di Gerlando :

@Ryan M.

Definitely get some quotes for commercial insurance. Typical I would expect commercial to be higher, but in your case it just may be cheaper. Good luck.

Thanks for the advice Marcello, I will look into commercial quotes as well. 

@Ryan M. One of the properties has (3) units with space heaters with replacement value of 637K, coverage is with 500,000 liability as well. Premium is under $2500. Property was built in 1920s. It is the same bread and butter that you will find mostly in New Bedford.

Originally posted by @Nicholas Davila :

@Ryan M. One of the properties has (3) units with space heaters with replacement value of 637K, coverage is with 500,000 liability as well. Premium is under $2500. Property was built in 1920s. It is the same bread and butter that you will find mostly in New Bedford.

 Thanks Nicholas, that is very helpful. Also going to drop you a DM, looks like we know some of the same people

For whats its worth in Manchester CT 3 family house was 226k owner occupied insurance is $2,100

I have a three unit in Erie pa the insurance is 400$ a year . This sounds completely insane but it’s Massachusetts so it makes sense