We’ve noticed that landlord insurance is an underserved corner of the broader insurance market. Many online portals and agents don’t explicitly quote on policies that cover tenant-occupied residential properties. This makes it difficult and time consuming to get competitive quotes. Making matters worse, investors are often required to have insurance in place at closing to meet lender requirements. This tightens up the timeline and leads to situations in which hurried investors end up paying too much in premiums.
How do you line up competitive landlord insurance prior to closing? How do you make sure your premiums are in line with the market going forward? Do you shop it annually?
I never used to shop my landlord insurance because I own a condo and so it’s pretty cheap to begin with. I think for me the 2 barriers were redoing my escrow account with a new policy just to save a few bucks and that I did not want to unbundle my auto insurance. However, I ended up finding really cheap auto insurance with another provider and because I was able to save so much there, it made sense to switch over my landlord policy as well and I ended up saving a couple dollars on it.
Like you said, it is a requirement when you buy a property so I doubt that this is something that landlords think about much let alone actually shop it. @devin What do you recommend? Having dealt with many landlords, do you see many shop this? Why or why not?
@ddjacobsen17 Interesting. I’m not aware of many carriers that will bundle auto with landlord insurance, since auto is a consumer product while coverage for rental properties usually falls under commercial. Are you sure you didn’t have a regular homeowners policy for your condo?
Personally, I’ve found that insurance referrals from real estate agents and escrow/title companies are rarely the lowest cost option. I generally recommend shopping around well in advance of closing and then reaching back out to another carrier or two every 12-18 months thereafter. I absolutely shop around whenever my existing carrier bumps the premium by more than 5% or so at renewal time, particularly if there’s not an obvious reason for the increase (like a recent natural disaster, etc).
The key is to have your rent rolls, requested coverages, and building replacement info organized and ready to go. That makes it so much easier to get competitive quotes without having to get on the phone and answer a hundred questions.
I use a national insurance company that caters to real estate investors. While I have never had a claim, luckily, I get better coverage for cheaper than when I used regular homeowners insurance.
I usually get a quote from my broker that sources from a bunch of different vendors and also get quotes from a few national companies. Most of my friends that have 10+ usually go with one carrier as there is ease of use having one, and big discounts for portfolio insurance with one company.
I’m not sure about rules for posting links here, but here goes.
I will post 2 links…the first link is an affiliate link that any proceeds from go towards sponsoring my local REIA group. If you do not want to sign up through that, I will post the second link directly to the company’s main page.
– External links removed –
They provide a minimum of $1,000,000 in liability coverage, monthly payments with no finance fees, and you can add/remove properties via their website. They provide a host of coverage types for real estate investors.
@jjrallc Thanks for asking! Links to external service providers, regardless of whether they are affiliate links, are currently not allowed on the Community Forums. You are of course welcome to discuss the particulars of your situation and/or offer advice and recommendations.
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I use an insurance broker for over 20 years. Now her insurance companies are not writing any new condo policies so I had to get it from another company. My auto policy offers an umbrella policy which covers up to 10 units. Once I went over the 10 units, I had to increase liability on the new units. I’m trying to get different quotes but it’s so much work. I’m also have problems figuring out how much coverage I need for my unit. For condos where you have to insure walls in, the agents tell me I need 50k for a 1-bed apt. Does anyone have a rule of thumb for picking out coverages? Thanks.
Devin, It takes years of reading and shopping for insurance to know what to ask for. They’ll sell you anything and cheap but you get what you pay for. I’ve had $30k to $90k losses just in the last 4 years and I’ve done pretty good, but its tricky. For example, Replacement Cost to Code may have a cap. My $30k roof replacement “to code” costs had to be broken out by the vendor and the insurance company had a $10k cap. I get into conversations with insurance agents and they all try their best but fall short. One needs to work with a commercial insurance agent and you have to specify if you want Wind Coverage, Replacement Cost (to code), Terrorist Acts, and so on. There’s more, if you insure a $900k building for $600k, they’ll only pay 2/3rds or you loss! Finally, you have to find out how responsive they are when a loss is incurred, if they have the staff to efficiently process your claim, and where they have offices for face-to-face meetings. Remember too, they don’t usually provide anything close to what a General Contractor would need to organize and manage your reconstruction/repair so be prepared! In sum, buying insurance is easy, buying the right insurance is an art. Oh, don’t throw anything damaged out before they have a chance to see it in person, pics are no good!