Hey @Kunal Lakhwani! I'm a broker in the Indianapolis area and represent Travelers. The dwelling limits are determined by a replacement cost estimator ran on each company's underwriting system. Auto-Owners is estimating it will cost $163k to replace, and Travelers is estimating it will cost $144k. If you think Travelers dwelling limit is low, you can insure it for more, but you are not guaranteed it if the house completely burns down.
In a worst case scenario, if the house burns down, a claims adjuster and/or a contractor is going to write a complete itemized estimate to rebuild the house with like, kind, and quality materials. If the adjuster or contractor's estimate is $150k, Travelers is only going to pay $144k, and Auto-Owners is only going to pay $150k. In this scenario, you didn't pay for enough insurance with Travelers, and you overpaid for insurance with Auto-Owners. There are other factors you may want to take into consideration though depending on your investment strategy and goals. In a worst case scenario where the house burns down, would you actually rebuild the home or would you pay off your loan and take your equity and any remainder of the settlement to go purchase another rental property? Do you plan on filing claims for $1k to $5k worth of covered damages, or do you have a relationship with a property management company or handyman that can make those cost-effective repairs, and you only plan on filing claims for large losses like $10k+ worth of damages?
If you would rebuild and/or plan on filing small claims, you might think about a lower deductible like $1,000 and a higher dwelling limit to be safe or add an endorsement Travelers offers called "Extended Replacement Cost," which adds an additional 25% to the dwelling limit in the event this something like this happens.
If you would not rebuild and you would just pay off the loan, take your equity, and invest elsewhere or you don't plan on filing small loss claims and only large loss claims, you may think about a higher deductible like $2,500 or $5,000 (will likely save you another $100 to $300 in annual premium) and insuring it for as close as the insurance company will allow you to get to the purchase price of the property (so at a minimum, your investment is protected).
The detached structures limit is just preset to 10% of the dwelling limit. Detached structures all consists of fences, sheds, decks, light poles, pools, etc. If the property has any of those and not just a detached garage, you may consider if you have enough coverage for detached structures.
Loss of rents is provided if the house becomes uninhabitable due to a covered loss (fire, tornado, etc.) and so your tenant is forced to move out. It is typically paid out monthly in the amount of 1/12 of the limit. I'd recommend taking whatever your total monthly income is for the property and times that by 12 to determine your coverage amount. If you charge $1,000 for rent, $1,000 x 12 = $12,000. If your house became uninhabitable, the adjuster would likely ask for a copy of your lease and bank statements to verify the rental income. The insurance company is not going to pay you a penny more than what you normally bring in for rental income. If you only bring in $1,000 a month, they aren't going to give you $2,000 just because you paid for higher limits.
In regards to the quotes, besides the nearly $20k difference in replacement cost for the dwelling, the coverages are pretty similar. The only difference is the Utility Line coverage on Auto-Owners. How much are you willing to pay to have coverage for your utility lines (main sewer line, drain lines, gas lines, electrical lines, etc.)?
Feel free to connect if I can be of any help.
