I have a mix use property, 3 units. 2 residential and 1 office space. My broker tells me that I am paying more insurance because of the commercial unit, which is just a tax office closed from May-November. They pay rent all year but I am wondering how much more am I paying in premiums a year, 20-30 % ? I bought the building 2 years ago and I inherited the lease, have 2 more years. Since they are closed during a large part of the year should I get a discount?
Insurance Agent · Nationwide · Member since 2014 · 2k+ posts · 1k+ votes
3y
@Mario Morales as @Cameron Moore states, the Vacancy is more of an issue and you would expect to pay a 20%-30% additional premium for properties that fall below the minimum 70% occupancy limit most insurance carriers have.
Now, the insurance carrier you are with may charge more for a commercial unit, but that is not a hard fast rule in the insurance industry. Some insurance carriers may charge more for the residential units because they are more comfortable with a low risk tax office.
In this market, the only way to know if you can get a better option is shop your policy. If your agent only has a few options, or is a direct writer and only has 1 option, then find an Independent agent to give you some quotes.