Homeowners Insurance Quotes seem typical?!

[Matt Romano]

Hows it going BP? I'm currently under contract with my first owner occupied multifamily (house hack), and I'm really looking forward to starting off this REI career. Scheduled to close soon, but I'm still shopping around for insurance quotes. I've gotten 3 so far, and the one that the Lender recommended is the cheapest so far. The property is in Warren, Rhode Island, and I got a price for $1439 annually ($120/mo) for $295,000 coverage with $1,000 deductible. No separate hurricane deductible. Thats honestly as much as I know about the policy. The other 2 quotes I got were pretty close in terms of premium amount ($1574/yr and $1487/yr). Anyone have any recommendations I should look into? Or do those prices seem more than reasonable? Thanks in advance!!!

-Matt 

[Charlie Matos]

Hey Matt,

That is about right. Just turned my owner occupied into a rental and moved into a new owner occupied. The rental's insurance cost is almost 1/2 what I paid when it was owner occupied. Rental is at $689/year was $1150/yr. Owner occupied is around $1259/yr on $285k owner occupied similar deductible.

[Matt Romano]

Thank you @Charlie Matos for the peace of mind. So you're saying once I move out in about 2 years my insurance premium should be reduced significantly? Owner occupied compared to fully rented out. 

[Michael Lucero]

Wow that price is crazy compared to where i live. In southern california i pay $500 a year for a $370k condo. Location, house age, and Type of house i guess impacts it. Onviously dont compare to my price given all that, just thought it was interesting.

[Matt Romano]

That is interesting Michael Lucero I'm wondering if that has to do partly with the fact that it is a condo, so HOA is responsible for the entire exterior and their own insurance on the buildings? Thus making your premium much simpler in terms of what's covered!

[Charlie Matos]

The variables to that don't allow me to comment specifically on your situation form pricing. Are you covering property/appliances you are leaving behind, what is the age of the property and condition, rates also fluctuate due to insurer's rates and reinsurer coverage strength.

[Nathaniel Merriman]

Congratulations!  I would suggest giving Allstate a try.  I'm at 1700 ish for 400k coverage and a 5% hurricane deductible.  Everyone else was around 2800 to 3500 with a lower hurricane deductible.  My feeling is that hurricane coverage is totally blown out of proportion in RI, worst storm in recent history did almost no damage even to houses ON the coast.  My house made it through the hurricane of 39  so i feel like its pretty damn solid.  I'm more concerned about cash flow now so when i end up leaving and it is no longer owner occupied i'll consider trying for a lower hurricane deductible.  

[John Mocker]

Matt,

Congrats on getting the new Home.  Because it is owner occupied the proper Insurance policy is a Homeowners.  The limit needed for the Building should be the Replacement Cost of the Building.   That is the cost to rebuild the structure with the same kind and quality materials from the foundation up.  Each company has their own program to calculate it so don't worry if the value varies in different companies.  There are different types of coverage for replacement cost:

  - Replacement Cost (policy limit is the max. they will pay)

  - Replacement Cost + 25% or 50% (the company will pay up to 125% or 150% of the policy limit if needed)

  - Guaranteed Replacement cost (the company will pay what it takes to replace the building regardless of the limit)

Of the three, Guaranteed RC (Replacement Cost) is the best option but many companies don't offer it.  The Building Coverage should be "Special Form" also called "All Risk".  There are some optional coverage you should consider:

   - Backup of Sewers & Drains

   - Ordinance & Law (especially for older homes)

The other coverage on a Homeowners policy includes:

    Contents

       most policies include 50% of the Building limit automatically for Contents.  That Limit can be increased if

       needed.  Make sure you get Replacement Cost coverage.  The other option, Actual Cash Value results in a

       much lower payout in the case of a claim

    Loss of Use/Rental Value

       Most homeowners policies will include 20% of the Building limit for Loss of Use automatically. 

    Other Structures

       Most homeowners policies will include 10% of the Building limit for Other Structures (detached buildings

       such as garage or shed) automatically. 

    Liability

       Most homeowners policies can be written with up to $500,000 in Personal Liability.  I recommend maxing that

       Limit and considering an Umbrella policy for at least an Additional $1,000,000 in Liability.  One optional

       coverage that many of my clients purchase is Personal Injury Liability (protection for Libel, Slander, etc..)

Ideally you want an Agent that can quote many companies to find the best solution for you. Recommendations from others in the REI community would be helpful if you are planning on additional purchases.