What Kind of Rental Insurance Should I Have?

[Alfredo Alfaro]

Hello, I am looking into getting a quad-plex or Tri-plex with home-owner occupancy so I can get in with a lower down payment. I was curious though about the insurance coverage I should have? I know usually a rental insurance coverage is needed if I wasn’t to live in the property but I also don’t know what a good deductible would be to start with or if $900 a month is a good rate. Any information would be great!! Thank you in advance. 

Also since I would be residing in the quad-plex would I need rental insurance and home owners insurance? 

[Ben Zimmerman]

It all comes down to risk tolerance and your individual situation.

It should go without saying, but insurance companies are profitable, which means in the long run they pay out less than they collect, which means that essentially you are paying them a lot of money, for only a little bit of repairs.

The caveat of course is you need enough cash on hand to cover deductibles.  I think I have something like a 10k or 20k deductible on my properties, but my insurance is dirt cheap on a monthly basis and I have enough cash on hand to easily cover those deductibles if I ever actually had to.  I don't need/want my insurance company to be involved in every minor defect the house goes through, I just need the insurance to cover catastrophic loss like a fire taking the entire building.

Of course I also don't live in areas that are prone to hail, flooding, tornados, or any other dramatic weather conditions.