Type of Insurance for SFH rental property?

Question

I'm buying a SFH as a residential rental property and wanted advice on what type of insurance I need.  Some of the forum responses are a few years old and I don't know if policies or views on policies have changed since then.  Deets:  SFH, 2/1, straight up residential rental, I am the property manager, no LLC as of now.

Nathan Grabau · Answer

Standard insurance, with a rental rider on it. I would make sure in your lease you require tenants to get renters insurance. Their renters insurance will cover things like damage they cause or displacement costs.

Alex L. · Answer

Talk to an (independent) insurance agent who is familiar with real estate investment insurance.

When I first got in the game not too long ago, I had 1 SFH. I've worked in insurance for about 5 years (personal lines, not commercial) so I knew that I could either (a) get a standard homeowner's policy with a rental rider, or (b) get a dwelling fire policy, which is what most professional landlords get (the major difference is whether or not the contents of the home are insured). So, I go a dwelling policy for the ACV of the property, and the cheapest I found was for $510/year through Foremost by using a local run-of-the-mill independent agent. The ACV limit was $65k, and I had bought the house for $18k, so I was comfortable simply taking the $65k and walking away if the house god forbid burnt down.

Then I started getting more serious about real estate investing, and bought two more SFHs at the same time. Called up the agent's office, was quoted for $700/yr and $650/yr for both houses, which would give them their own dwelling fire policies. I bit the bullet and paid the price, the ACV limit was for $50k for each property, and I paid $22k and $25k so no big deal. But then about two weeks later I joined a local real estate FB group, and learned about everyone's go-to insurance agency in the area. Gave them a call, told them my situation, and they put me together a business policy. It was a single policy for a business ("Description: LANDLORD, Type: individual/sole proprietor") that included all 3 properties, had all the previous coverage I had including increased liability limits AND ACV values by about 55%, and the cost? Just $620/yr through American National.

I'm not sure if you can get a business policy for just a single rental... I don't see why you couldn't, but again, my personal in depth experience with insurance is personal lines, not commercial. Either way, definitely see which agents in your area are landlord-friendly. It pays to look around. In my case, it saved me over $1200/yr.

Eliott Elias · Answer

You need a landlord policy. Talk to a insurance agent about your options ie. what the extent of your coverage will look like.

Randy Rodenhouse · Answer

You need to get a landlord policy on the property. I would get a pretty high amount of liability coverage since liability insurance is very inexpensive.  I also have the tenants get renters insurance and have them put you on the policy.

Type of Insurance for SFH rental property?

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