Insurance Cost Mixed Use Building - Illinois

[Danielle Cage]

Hi,

I have my first multi unit under contract located in Illinois. It’s a mixed use building with 4 units. 3 are being used residentially and 1 as a business.

The business is a studio with no equipment inside. There is essentially a couch, a salon chair, and a bowl to wash hair. It might be 300 sq ft. Rent is currently only 500.00/ mo.

My insurance agent said because of this unit I need a commercial landlord policy and the price is 200.00 more a month than anticipated.

Does anyone have experience with this? Does this seem accurate for Illinois? Any thoughts on what I can do to lower the cost?

I can convert this to a residential studio so the insurance cost will drop but it will cost me ~8k.