Insurance Premium Assumption for Underwriting

[Daniel Sanchez]

Howdy Folks,

I am in the process of analyzing some deals and I had a question regarding the insurance underwriting process. First, how is real estate insurance calculated, replacement cost? 

I want to be able to input a base number x% of the purchase price. The x could be scaled up or down depending on the age of the home.

Ex: An older one would have a 1% x purchase price = annual insurance premium.


Ex: A newer home would have a 2% x purchase price = annual insurance premium.

Would this be a decent rough estimate or are there better ways? Again, I want something scalable to be able to apply to multiple properties quickly and effectively.