Cost of fire insurance is killing my deal!

[Joseph Gibney]

Hi all.  I've got a duplex in East TN under contract.  It's the second duplex I've offered on in the last month (last one didn't make it to contract).  The two deals are similar in price & rent generation (rent is 1.5% of price).

The fire insurance quote I received on my first deal was around $650 and in my model I used that same number for the second deal.  Now that I've progressed to contract, the actual insurance quote is $1,700.  The first duplex was wood construction and apparently because the second duplex is block, the insurance company is saying the cost to rebuild is $175,000 (price of duplex is well under $100,000.  Unfortunately the additional cost of insurance vs. what I expected it to be is killing my returns and I'm not sure I can move forward unless I find a reputable fire insurance policy for $600-$800.

Has anyone else ever had this problem with insurance coming in way higher than expected and have any ideas for me?