Jacksonville, FL · Member since 2015 · 17 posts · 2 votes
Good morning everyone,
I recently acquired a property that has a single family home and a mother-in law apartment in the back. I am having a lot of trouble finding the right insurance for this combo because my insurance broker is stating that I need to have two different policies on the property, one for each building, even though the mother-in law is only 600 sqft. I was able to push through the mortgage using an HO-3 policy because I will be living on the mother-in law for a while until I can find the next property, but now my broker is stating that we need a DP-3 policy which is double of what my original HO-3 quote was. They claim the big issue is that the apartment does not have its own legal address and is not listed in the property appraiser records in my county. This property is in Florida and I welcome any opinions on this subject.
Rental Property Investor · East Wenatchee, WA · Member since 2014 · 10k+ posts · 16k+ votes
10y
My insurer did one of these. Have a house with a little duplex in back. Same parcel number. They insured the house and counted the back units as an outbuilding. That was with Allstate, who also has my primary and auto policies. I have good luck with State Farm as well. They let me do stand-alone landlord policies without needing primary or auto. Would think it would be easier even as a primary. Good luck @Edward Pulido!
Insurance Agent · Member since 2015 · 191 posts · 124 votes
10y
It sounds like there are two issues here.
1. Do I need separate policies for each building
No. both properties can be on the same policy and liability limits will be shared. You have two options for property insurance. The first option is each building will have a separate limit and that is the most you will get for that building in the event of a total loss. The second option is to have a "blanket" limit. This is a bit more expensive but allows you to combine the replacement cost of both buildings into one limit. The advantage here is that if there is a total loss to one of the buildings that cost more to replace than your estimate you can use the entire blanket limit to restore that property. Refer to an actual policy for the details and limitations to this summary.
2. Do I need HO-03 "Homeowners" Insurance of DW-03 "Dwelling Fire" Insurance.
Homeowners insurance is meant for a property that is the primary residence of the named insured (you). You will need dwelling fire coverage for all rental properties. Dwelling fire insurance can be an extension of your homeowners policy if the insurer allows. This is generally cheaper but any claims you have due to renters will effect your homeowners premiums for years to come. You can also purchase a separate dwelling fire policy through a commercial lines insurer. This is generally a requirement if your property is in an LLC. It is more expensive regardless but minimizes the chance that something done by a renter will effect your homeowners policy. Again you will need to refer to an actual policy as this is just a summary.
Insurance Agent · Maitland, FL · Member since 2015 · 397 posts · 244 votes
10y
Do you have a recent 4 point on it? Florida is the bigger issue here with limited markets, but dp policies do cost more than ho.
If you have a 4 point, you can forward and I can give a second opinion pretty quickly.
Dp is what you need.