Insuring single familiy home split into multiple units

[Matt Wassum]

Hi,

I have a few properties that I thought would be really good deals, but insurance has turned out to be hard to get for them / really expensive.  I purchased two houses in Bristol, Tennessee and they are each split into 3 different units with their own kitchens, bathrooms, etc.  I have learned that insurance companies really don't like this setup and I have been charged like $1,500 bucks a year in insurance for each property which is a lot considering I purchased the properties for $50K and $80K, but they way that they are acting I wouldn't be surprised if they end up not wanting to insure them at all. 

I am interested to see if anyone has ideas on how to insure these types of properties in a more cost efficient manner.

Thanks,

Matt

[John Mocker]

Matt,

If the houses are Legal 3 family buildings they should be insurable under a "Dwelling Fire" policy.  That type of policy is used for 1-4 family houses rented to others.  We have been told by multiple companies that the losses are normally greater on the 3-4 family houses verse the 1-2 family houses. 

I think you need to get quotes from multiple companies (that may require multiple agents or one agent that represents a lot of companies).   You want to request a comparison with the same limits you have and then a quote with any changes they recommend.

Because of differences in age, location, fire protection, limits, etc. you may find that splitting the two houses to different agents/companies may result in best rates but if its close I recommend putting both with the same company.