Home owners insurance on a duplex

[Carrie A.]

Holy crap!!!  I'm going through with my first deal. It's a 2/1 duplex with a carport. Got my first insurance quote!  Wowzer!!!  $1700.00+ per year!!!  AND, they are super concerned about how much experience I have with rentals.....  is this the norm????  I'm confused!

[John Mocker]

Carrie

As you start searching you will get quotes with different limits and term.  That can make it hard to compare sometimes.  You may want to tell the agents you contact what coverage you are looking for.  Tell them they can make recommendations for additions or deletions but that you would like a quote with limits of .....

For the rental properties, at minimum you should have:

1. Building Coverage: if available, get Special Form (sometimes called "All Risk") and the coverage should

be Replacement Cost coverage.

2. Contents Coverage: If you are renting the units with Appliances, Furniture, etc. you need to cover the value of those items. the coverage should also be at Replacement cost. The most common level of coverage is "named perils" which is not as good as "special form". Some companies will quote both.

3. Loss of Rents/Income: Make sure the coverage is enough for 12 mos of rental income

4. Liability: I recommend maximizing the coverage under the policy (that would be $500,000 or $1,000,000 for most polciies. I normally recommend an Umbrella policy as well. That can give additional coverage if the the liability limits of the underlying policy get exhausted. The Umbrellas are normally written in $1,000,000 increments for the limits. If "personal injury" is an available option I would recommend it. It provides coverage against claims of Libel, Slander, wrongful imprisonment, etc.

Depending on the details of the property (age, construction, etc.) there may be other coverages that would be recommended. For example, if the house is on a non-conforming lot or the building ordinances have changed and you would not be able to build the same way if it burned down, you should look at the optional coverage "Ordiance & Law".

Hope this helps.