How do you insure your rentals? Cash value or loan value?

[Kirby Allen]

Closing on your first two rental properties today and having questions about the insurance. Our agent is quoting one house with a cash value of 55k and the second with a cash value of 45k. We have 41k in the deal. How do you suggest we cover it? With the actual cash value or just enough to cover the loan so we have lower premiums?

[Bryan H.]

Your mortgage company will probably dictate you get insurance for the amount of the purchase and list them as additionally insured. They will want to make sure they are covered for the money they are loaning.