SFR rental policy 40% higher?

[Rob Myers]

I'm in the process of converting a vacation home I own into a rental property as well as trying to pick up another SFR home as a rental in the near future. Right now, the vacation home is insured through a brand name national carrier for around $600/year with $1M liability and $1,000 deductible. When talking to the insurance agent this week, I was quoted $1,000/year to go to a commercial policy with similar coverage limits. Does that seem appropriate? Both policies are for replacement value on a 1,800SF home in WI.

I didn't expect to see such a big jump in premiums. I understand that having a tenant in the building is a higher risk than owner occupied, but somehow I thought that would be offset in that there is no personal property to cover anymore.

My next step is to find a good independent broker to look at my entire insurance portfolio. Is there anything else I should be considering at the moment? This is my first venture into the world of holding rental property. Thanks for the help!