Landlord insurace, umbrella coverage, costs?

Rehabbing, Fix and Flip, Rental Properties
1

Hi,

Would any one care to advise me on what type of landlord insurance you usually get for your properties, and costs?

I’ll be getting a 2/1 600 SQ FT, SFH property in Los Angeles.
Insurance cost to rebuild if damaged completely, @ $140,000.

I’ve been thinking of getting a 2 million liability, 200K damages, and flood.

I’m getting estimates from $800 up to $2200. Feel I’m being duped by insurance agents.

Regards,

Douglas

2

Get the best insurance you can afford based on what you have to protect. I have significant assets outside my real estate business and try to cover each of my properties with $500K liability for about $500/year for a $200K property. I have an umbrella policy on top of that for $2M for about $600/year.

Buy what you need based on what you have to protect. If you have nothing to protevt, you don’t need much insurance.

jmd_forest

3

Anything above $1000 for such a policy for a house of that size would be a rip-off in my area (virginia). But for LA? I have no idea.

If you have multiple properties in your name, I would also advise an umbrella policy for additional coverage - this is primarily for liability purposes, not property damage. It’s usually not very expensive to get additional coverage of $1-2mm for multiple properties. I think it cost me under $1k for $2mm for 4 duplexes. Get a good referral for an insurance agent in your area - someone that comes recommended and is trustworthy.

4

Our recent policies have been with GuideOne. We’re paying about $250/yr for $30K properties. We have $500K liability on those. If the insurance agents are quoting you for $300K or so liability, ask about what it costs to bump that to $500K or $1MM. Sometimes it’s not that much more. FWIW, GuideOne was about 1/2 the price of almost everyone else around here.

5

Hi,

Thanks for all the replies.
The quotes are for 1Mill liability and $100,000 for the property.
Flood insurance is included.

Regards,

Douglas

6

Although I have no direct experience with flood insurance, everything I have read indicates it is expensive compared to a standard dwelling policy. Make sure you NEED it before buying it. Generally it is only required if you are in a government designated flood plane

jmd_forest

7

I was just researching this issue yesterday…
Looks like if you your house is in FEMA map zones B, C, or X you’re not required to buy flood insurance (although I don’t know whether it’s the government or lenders who require it if you do need it).

http://msc.fema.gov/webapp/wcs/stores/servlet/info?storeId=10001&catalogId=10001&langId=-1&content=floodZones&title=FEMA%20Flood%20Zone%20Designations

8

Hi,

The property is not in a flood zone.
It’s just that I’m used to always getting it. But I’m thinking of saving $400 or so a year on flood insurance.
You just hear stories from all over the US, about people loosing their homes to flood, because no other insurance will cover those damages when there is a flood.

After all the replies to my question, I know there hasn’t been a flood in this area for at least 100 years… knock on wood!

So I may as well save the flood insurance toward something else.

Regards,

Douglas