Rental Property Home Insurance Estimate

[Account Closed]

Hello All,

I have a quick question and I appreciate your help in advance. Can you tell me what tool do you use/ how do you figure out how much would the home insurance be for a rental property when you try to analyze a deal ? Thank you!

[Ray Lai]

@Account Closed

There is no software that does this. Your homeowner's insurance has many variables including location, different risk factors, type of materials it's built from, square footage, age, etc.

There is a rule of thumb that's easy to use for quick estimation, but the only way is to get quotes. The quick estimation is to divide the value of the home by 1000 and multiply by 3.5; it doesn't work well for low priced investment properties though like mine.

On my rental property I got 3 quotes for the same property. $359 from Amica, $1385 from Geico, and $475 from Shelter Insurance companies on my 3br/1ba, 865 SFH in Hammond, IN.

I went with the $475 one due to the relationship with the agent.

Hope this helps you.

Source:
According to the Federal Reserve Bureau, the average cost of an annual premium for homeowners insurance is between $300 and $1,000. For most homeowners, the annual costs for a homeowners insurance policy can be estimated by dividing the value of the home by 1,000, then multiplying the result by $3.50.