Rental Property Insurance ACV vs RC

[Lisa Yang]

Hi BP,

I am purchasing my first rental home in Madison Heights, MI and was hoping to gain some knowledge on insurance policies.

The purchase price of the house is 115K and I will owe 75% (86K) to the mortgage company. The appraisal came back at 120K. I currently have an ACV insurance quote for about $56 per month for 115K Dwelling. Do you think this is sufficient or do you think it would be smarter to go with a replacement policy that costs about $200-300 more per year?

Thanks in advance for your insights!