Surplus Insurance Line for Student Rentals

[Mark Esperti]

I'm currently doing my due diligence on a multifamily that's located within a college campus.  It's current tenants are not students but my plan is to replace the tenants with students within the year after purchase.  

My insurance provider has given me a warning that this will change my insurance from a standard dwelling/fire to a surplus line, specific to undergrad tenants.  The premium will go from $4k to nearly $12k.  How are landlords with student rentals handling this?   Do most landlords just keep this under wraps?

Thanks in advance!

[Owen Rosen]

Quote from @Mark Esperti:

I'm currently doing my due diligence on a multifamily that's located within a college campus.  It's current tenants are not students but my plan is to replace the tenants with students within the year after purchase.  

My insurance provider has given me a warning that this will change my insurance from a standard dwelling/fire to a surplus line, specific to undergrad tenants.  The premium will go from $4k to nearly $12k.  How are landlords with student rentals handling this?   Do most landlords just keep this under wraps?

Thanks in advance!

 I assume this is 1-4 units?  Student housing is a definite no for many or perhaps most/all standard carriers but pricing doesn't necessarily have to be triple.  It will be more certainly.

[Nick M.]

Just because you're renting to students, doesn't necessarily make it student housing in the eyes of an insurance company.  The insurance company will have a very specific definition of what "Student Housing" means to them. Such as extended periods of vacancy between semesters...

I have a MTR that is close to a university campus and my current tenants are students, but they also passed all the usual tenant screening in the same way that I've rented to other mid-term tenants in the past.

[James K.]

Hi Mark, try Berlin insurance out of Worcester. They have given me great rates. 

Jim

[Andrew Freed]

@Mark Esperti - I also recommend checking with prime insurance, they work a lot with investors and can really find the right product for you. I utilize them on all my rentals in Worcester, over 200+. 

Also, one of my buddies owns a ton of student rentals near clark. Happy to make an introduction, feel free to shoot me a DM. 

[Zachary Gray]

I think working with an insurance broker is a great way to go to derive the most competitive quote at no cost to you.

I also think that you can increase your deductible up to say 5k as well as request your tenants carry renters insurance. This will reduce likelihood of a claim and your premium