San Antonio, TX - Appropriate type of insurance for rental house

[Miles Stanley]

OK, not really sure of the question to ask here.

We are on day 3 of our option period and i am trying to get insurance quotes done for this rental house i am planning to fix up and rent (SFR).  Now i own a primary residence and have a run-o'-the-mill homeowners policy, but i wasn't 100% sure about what 'typical' policies and coverage were obtained for rental homes.

My wife was trying to get a quote online yesterday and the house valuation to rebuild came in at like $204k, but the ARV for the area is no more than $140k.  This doesn't add up for me since i can't imagine spending $204k to rebuild a house where the market values are so much lower.  Are we looking at too much coverage possibly?

i see a lot of monthly insurance rates (from lender, other investors) at around $65 a month, but the estimate we were given from this online system was like double that.

It's our first one, so I'm in the middle of the option period frenzy to get everything done in time and i wanted to be sure I'm thinking about about this right. 

I'm curious if any local investors (if location has anything to do with it...i'm guessing it does) would mind sharing what types of policies they get for their rental houses.

Thanks for the input.

[Rick Pozos]

Hey @Miles Stanley if you were at my meeting several months ago you would have heard Monica James with Farmers talk about all of the different types of insurance that are available and where you need to use them. A rental house is going to need what some people call a rental policy or landlord policy. Of course you can add and subtract little bits here and there. You can insure the cost to rebuild or just the cost of purchase. 

I value service over the lowest price. If it is the lowest price, even better. 

The other day when I closed on a property I completely forgot about insurance. It was financed and my title company called and asked about insurance about an hour before closing. Closing was at 5pm. One phone call with a few details of the property and coverage was in place. Could I have gotten the policy $50 or $100 a year cheaper? maybe. Taking care of things quickly and so that I dont have to worry about them is worth the money.