How much are you spending on home insurance?

Question

I've been having some issues with some of the insurance quotes I've gotten on my properties lately. One one unit (a SFH), I have a fairly low deductible ($1000) but the monthly premium has gone up 20% in 2 years and now costs more than 1 month's rent (house rents for $1150, insurance quoted $1225). Then I have a duplex which is currently on a month-to-month plan where the premium is fairly reasonable ($1400/yr. while the 2 units rent for $2100) but the deductible is enormous ($5000 for most claims, $10k for hurricane wind damage).

I'm curious what others are paying for their insurance? Namely what is the ratio of rent price to yearly premium and what kinds of deductibles you are paying.

Luis Vilar · Answer

@Jason L. What I notices is that local small agents will give you a better price. My suggestion is to call a couple of local agents and get some quotes.

Another company that I noticed that have very competitive premiums is https://www.kin.com/

Luis Vilar · Answer

Hi! I am on the process of getting my first deal in Palm Beach County. I just got a quote for the property I am buying and the premium came back at $1250/year, which is not bad. The insurance agent told me that if I add shutters, fire alarms, security alarm and get new roof (which I have to get), the premium will be cut almost in half.

A tool that I use when analyzing a deal is this:

https://www.geico.com/homeowners-insurance/

You can add the property info and it will give you a instant quote of the price.

Hope it helps!

Jay Helms · Answer

@Jason L.- noticed you're in Florida. Just want to ensure you're taking full advantage of any credits that may be available. For example, I had a 1 bed/1bath property insurance premium was $1,100/year. Once I I had hurricane clips installed ($950) it passed the wind mitigation inspection and took my premium down to $550/year.

On my personal residence insurance was going to cost $2200/year, had the same hurricane clips installed ($350 - found a better priced handyman) and this cut our insurance premium almost in half.

Point of the story is look (or have your insurance agent look) for all available credits and recommendation actions to take to gain those credits.

Jason L. · Answer

Nice tool, Luis. Funny thing is I entered my newest property first and it came back, "We're not taking new clients at this time." Then I tried my other property and got an instant quote for $50/month. I guess I'll talk to them and see what they can do.

Both houses have brand new roofs, so I definitely feel like I'm paying too much. I'll have to ask for a few more quotes. Thanks to everyone for their input.

Jason Bott · Answer

@Jason L. Be aware that Florida insurance rates and guidelines are completely different from the rest of the US.  Hearing what others pay throughout the US will just get you mad..lol

In FL, age of the building, construction, location to the coast, all have a huge impact on the premium.

I suggest talking with several local independent agents and see what they can do for you.

Frank Adams · Answer

I notice you're in Florida. Didn't Governor Bush DE-regulate the insurance industry. His brother George sure did in Texas and we got screwed. 10 years ago we sold our SFH in TX, about 2200 square feet, sold for $230,000. In 2007 we had paid $1600/year. WITH THREE PERCENT DEDUCTIBLE. Think for a minute at what point you'd file a claim with that deductible.

We live in Colorado now, our house is worth about $375K in today's market and we pay $1100/year with $1,000 deductible.

Andrew Jones · Answer

I'm licensed and have been working full time in the insurance industry for 10 years.  My experience is California specific, but here is some general stuff to consider:

-Are you in a high risk area?  Your claim record is important, but if you are in an area prone to natural disasters like wildfire or hurricane you'll get lumped into a higher risk group.

-Are there issues with your property in particular?  Is the roof old? Knob and Tube wiring?  If your property is sub par you'll be denied or placed with a higher risk carrier (ie pay more).  Conversely did you tell your agent about improvements you've made?  I've had clients add second stories to their houses and not tell me...basically they were half covered.  I've also had clients get monitored alarm service, add fire suppression systems, etc that would have gotten them discounts had I known.

-Are you with a broker or a captive agent?  My dad was a great guy and a highly trained agent, but being with State Farm only allowed him to sell State Farm products.  A good broker (like me...shameless plug) will be able to shop dozens of companies for you to get a better rate, but be sure they're quoting a rental dwelling policy (RDP for short).  Homeowners insurance DOES NOT cover the most common issues with a rental.  You need liability to extend to landlord/tenant issues and for there to be coverage on loss of rents if your property is uninhabitable.

How much are you spending on home insurance?

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