Landlord Insurance Advice (Memphis TN)

[Casey Adams]

Hello All,

I currently just closed on my first BRRRR/rental property today and I'm trying to get everything situated as quickly as possible to get rehab under way (I don't want to hold a balance on my HELOC for very long!). I need to find landlord insurance before the property management can start and the rehab can begin.

I got a quote from a insurance company I use for my own home in CA. The quote was $1400/year when I budgeted for $900-$950/year, which will definitely hurt my bottom line. Here is what I was quoted :

$240k structure coverage + 25% ($60k) (I imagine ARV to be ~$120k-$130k)
$2500 personal property
$24k Rental coverage (I'm expecting ~$1300/month so this may be high)
$300k liability insurance (Although it's $1 difference/month for $1m)
Sump/water pump coverage
Total = $117.72

This quote included the deductions for an alarm service and fire alarms equipped throughout (Do y'all usually equip your rentals with alarm systems?)

I did not pull the trigger but I am wondering the threshold of coverage I should look for as this is my first venture.
I appreciate your time and advice on this, as I'm a rookie starting my journey

Thank you everyone that helps and any advice is appreciated!

Casey

[Stephen Akindona]

@Casey Adams yes you will need builders risk policy for a property needing rehab. Most insurance companies wont even issue the policy if the current condition is distressed. I have a good recommendation for an agent that writes all of our builders risk policies. Also $1,400 a year is way too high for insurance on a rental of this profile. You definitely do NOT want your coverage limit to be the ARV but instead the actual rebuild costs if you experience a total loss. I am currently covering all my properties at $150 a foot.

Some will have a difference of opinion, but I typically get the highest possible deducible and opt out of any extra coverages. I will only ever file an insurance claim on a property that has a catastrophic event. So for me personally, I want my costs of that coverage to be as low as possible. Shoot me a DM and I can give you my contacts for insurance.