Rental property insurance

[Sonny Samuelson]

Hello;

I am new to the group and new to real estate investing. I got my first rental property and in the process of shopping for a good insurance for my rental home. The property is located in Austin TX.

I would appreciate your feedback on who provides  a good reputable insurance for rental properties. Also can you please help me decide what coverage is a must to protect myself from liability and Law suites. Thank you

[Kelby K.]

Hi Sonny and welcome to BP. Congrats on your rental property! I also invested in rental properties in Austin recently and I compared quotes from 3 different agencies. Check with your home or auto insurance agent first. 

The agents will help you decide limits and answer questions you may have. The agencies I quoted were 1. Philip Doak Southwest Insurance Group 2. Ron Urias Farmers Insurance 3. Heather Fraley State Farm Insurance

Best wishes 

[Steve R.]

Hi Sonny,

Welcome to BP! I only have a few rentals right now but I will share what I know. I have one of my rentals grandfathered in at a low rate with American Family but they have not been competitive on my newer properties. My last two have been with a small, local insurance broker in my town of Hibbing, MN. I have 300,000 liability per property on my policies and I can up the medical payouts from $1,000 to $5,000 for just a few dollars more. My insurance agent explained to me that if your tenant gets injured on the property, they will pay for the medical bills without asking too many questions up to the limit of your medical payments on your policy. 

Once you get a few more properties it wouldn't be a bad idea to get an umbrella policy for $1,000,000 or so to protect yourself. Good luck!

[David Ivy]

Congratulations on your first rental property, Sonny! I assume you own the property yourself, not through an LLC or some other legal entity. Is that right? Either way, if you contact me directly, I'd be happy to put you in touch with some good insurance agents in Austin. I also second @Kelby K.'s suggestion to contact your personal agent first. You can get multi-policy discounts. However, it's always worth shopping around.

[Sonny Samuelson]

Dear BP members;

Thank you so much for the wonderful feedback this is a great site. I did indeed check with my homeowners/ auto insurance and they do no offer any coverage for rental properties

I saw an example of coverage that included the following:

Dwelling coverage (A)

Dwelling extra replacement cost

Dwelling extension 

Business liability coverage (L) each occurrence

Business liability coverage (L) annual aggregate

Premises medical payments coverage (M)

Loss of rent

Are all these coverages required? 

One last question? Would creating an LLC be worth it for one property?

Thank you

[Jacob Passmore]

@Sonny Samuelson, great to see people investing in Central Texas! Some of those coverages you listed above would not be "required", it can vary insurance carrier to carrier as an example, some may automatically give you dwelling extensions/extra replacement cost as a part of policy. As far as an LLC goes, it's been debated heavily on BP recently, and I'm not sure what the consensus is??!Good Luck!

[Chas Semple]

I would  recommend shopping the independent agents first, then see if Farmers, State Farm, and Allatate can compete.  My experience in Texas with homeowners and auto is that the independent brokers keep the big boys competitive.  And sometimes they can place you with a big carrier, but they're going to know the market better.  Corey with Koehler Barton writes the Austin area, and does a great job for me.

[Sonny Samuelson]

Dear BP member;

Can you please provide me with the contact info of Corey? Is he an independent agent? Have you used him before for insurance on rental properties? I am sorry for asking too many questions but I am new at this. Thank you

[Rod Hanks]

I can help. We insure lots of investors in Texas. Depending on if you are going to stay small and only own a couple properties we would recommend individual policies with 300k liability or if you have plans to go big we recommend a commercial policy which will cover all of your properties on one policy and a blanket 1 million liability. We deal with a number of companies that insure property investors. PM me if I can help.

[Sonny Samuelson]

Dear BP members;

What is a typical policy deductibles on a DP3 insurance for a rental property? Is 3% considered too high? Should I consider getting 1%. Thank you for your valuable feedback