Owner Occupied 4 Unit Plex Insurance

[Zenas Underwood]

Need insurance on an owner occupied 4 unit property. I am very confused on what coverages I need. I have received quotes with yearly premiums ranging from $1600 - $4500. Each quote that I have received is structured differently with various coverages. What exactly do I need to protect my property and myself?

If you have an owner occupied multifamily what kind of policies and coverages are you carrying?

[John Mocker]

Zenas
I understand your confusion. Below is a post a did a couple of years ago on a similar question. It gives an overview of what some of the coverage means.

"... As long as you are living there, the proper policy for a 3 family is a "Homeowners" policy. You want a "HO3" Form or better. Most homeowners policies include:

1. Dwelling (Building coverage)

The limit should be based on the Replacement Cost of the building (cost to rebuild with the same kind and quality excluding the foundation​)

2. Contents (Personal Property): most homeowners policies give a set % of the Building limit for Contents. Usually 50 - 70% of the building limit. You can increase the limit if needed.

3. Detached Structures: for other buildings on the property (ie. sheds & detached garages)

Again, there is normally an included limit of 10% of the building limit. That can be increased if needed.

4. Loss of Use / Loss of Rents: Normally, there is a 20% included limit. Loss of use is for your additional expenses if you can not live there due to a covered claim (ie. Fire). The Loss of Rents is for the loss of Rental income if the tenants can not occupy the house after a covered loss.

5. Personal Liability: For claims due to Bodily Injury or Property Damage that you become Liable for and which is covered under the policy. Companies normally offer limits up to $500,000 but some offer $1,000,000. Buy the max.

6. Medical Payments: Provides coverage for an injury suffered on the premises. Does not require proof that you were at fault. Used to keep small loses into becoming lawsuits.

Normally offered up to $5,000 but check to see if higher limits are available.

7. Deductible: This is not a coverage but rather your portion of a claim. Most better policies will not have a deductible for either the Liability or Medical payments coverage. It will apply to the other 4 coverages. You can select the amount of the deductible, usually ranges from $500 to $5,000. The higher the deductible the lower your overall premium but get quotes on all the deductibles you are interested in. Sometimes the incremental savings from $1,000 to $2,500 or from $2,500 to $5,000 are too small to make the higher deductible worthwhile. ***depending on how far the house is from the coast, you may also be required to have a separate Wind or Hurricane deductible. Most times, the deductible will be 2% to 5% of the building value. That is a significant amount (on a $500,000 building that comes to $10,000 for 2% or $25,000 for 5%). A policy with a higher premium may be a better deal if it does not have a wind deductible.

There are many endorsements that are available on the homeowners policy. Without knowing the details I can not suggest which would be right to add on. Several you should pay attention to are:

- Ordinance & Law: Provides additional building coverage to deal with rebuilding cost increases due to changes in Zoning or Building laws

- Personal Injury Liability: Libel, defimation of character, wrongful imprisionment, etc.
(normally recommended, especially if you are a landlord)

- Water Backup: For water damage due to the backup of Sewers or Drains.

- Personal Articles: Coverage for belongings that have a special or collectors value such as Jewelery, Furs, Fine Arts, Collectibles, etc...

Your age should not be a factor on the pricing but, depending on the company these other factors may get you credits:

- Insurance Score (company pulls certain info out of your credit report)

It is not your credit score but generally better credit will result in a better score

- Time at your job

- Education level

- time at current residence

If you have questions on any of this info PM me. Good Luck