Liability Insurance on Older Properties

[David Kramer]

BP Community,

I recently got a SFR under contract that was built in 1900. Though extensively rehabbed, the age of the property has made insurance brokers I have spoken to a little wary. I was offered only Cash Value policies instead of Replacement Cost properties. Additionally, carrying a coverage of only the mortgage amount reduced my annual premium by quite a bit. More specifically, the mortgage is approximately $107,000, which is well below the cost to build a new property if I were to experience a total loss event. For investors with experience dealing with older properties, what insurance advice do you have to offer?

[Will Gaston]

@David Kramer are you speaking to true insurance brokers (i.e. have a vast network of companies/options) or an insurance agent that works for State Farm, Allstate etc? It sounds like you're talking to the former but just want to be clear as those are who you want to talk to.

I have lots of very old properties as I do student rentals in neighborhoods that were first built in the late 1890's-1920's. I work with a broker who farms my stuff out to Penn-National, Auto-Owners and a few other places in the past.

My experience with insurance is this: talk to lots and lots of brokers. You'll learn a lot plus realize what products and availability are truly out there. It's important to be insured properly plus you'll learn a lot which will help you in the future.