I am about to purchase a property and was just called by the bank letting me know that I must purchase homeowners insurance/rentors insurance for this property as it will not be owner occupied. Having rented out a condo a few years back and having paid around $18 per month, I was completely floored to hear that the rate for renters insurance was going to be $1085 for the year. We are talking a nice area, walk your dogs at night, kid friendly, not crime ridden. Does this cost seem to be extraordinary? The insurance company that I contacted is one of the top overall auto/home/life insurers. Ouch.
Yes you must purchase insurance. The bank wants to know that if the house burns down, they are going to get their money back. They are also interested to know that if your tenant trips on the back steps and sues that there is a liability policy to pay them instead of them placing a lean on the house. The costs depend on where you are and the replacement cost of the house. Renter’s insurance is only on the contents of the house so it is $200/year. This policy that you need is on the structure and liability not contents ant that varies but should run $1k to $2k per year.
Ok, I completely understand what you are saying. The quote that I was receiving was for insurance on the structure at its replacement value. No mention was made of any particular renter or their belongings. So, I’m thinking that the quote for $1085 was to cover replacement value on the structure only. Geeez.
Just checked my homeowners policy on my house and it runs just over $400 per year… for a house that is 3 times the price of what I’m buying. hmmmmmmm
yeah, your getting ripped off somewhere. I just got renter insurance and it was only $338 per year on a $45k house through Foremost Insurance. I would say it should no matter what be more than $500-$600 per year.
I just got renter insurance and it was only $338 per year
black95gt you have to remember you are talking about renters insurance. That only covers the contents, it does not cover the structure. What you want to compare is homeowners insurance. Don’t confuse the two.
pauly99 if you can get a house covered for $400/year, let me know who you are using. I need to check them out.
I termed it wrong. I am the landlord and the homeowners insurance for a dwelling used for a rental property is $338 per year.
Before the hurricanes, insurance was pretty reasonable here…the last policy I bought was for a $65K house and it was over $800 a year from Foremost (the only company writing at the time)…I had been using USAA and was paying around $250 a year previously.
Keith