Estimating insurance costs

[streetcore]

Hi there,

I've been building spreadsheets for a few properties and I'm wondering if there is a way to estimate annual insurance costs? I've looked at a couple online calculators, but they seem to be for owner occupied properties.

I know there are a lot of variables, but is it possible to make an educated estimate based on the value of a property? Are premiums generally higher or lower for rental properties that are not owner occupied? What about triplex/duplex vs single family?

Thanks very much.

 

[E]

Hi I've looked in to student rental insurance before and know that it's more expensive than normal house insurance. The insurance broker charges extra for every additional student.

 

[Matt Crowley]

The best way is to call up Park Insurance if you are a REIN member and get a quote on a likely property you are looking at purchasing.

If you are looking at larger apartment purchases then there are some metrics you can use to simplify:

• Building and contents insurance (take cost of building and contents and multiply by 0.0925 per every $100 in value)
• Rental income insurance (take three year's gross operating income and multiply by 0.0925 per every $100 in value)
• General liability insurance (15% of the above two categories)

Personally, I wouldn't bother with this greater detail for something smaller than 20 units.

 

[streetcore]

The best way is to call up Park Insurance if you are a REIN member and get a quote on a likely property you are looking at purchasing.

I'm not a REIN member, but thanks for the suggestion. I'm still in the learning and research stages at the moment and not looking at anything larger than a triplex.

 

[Matt Crowley]

No worries. I'm sure there are similar insurance products out there. A part of the challenge is finding an insurance company that regularly does business with smaller secondary market rentals. My recommendation is really just based on hearing relatively few complaints from Park Insurance REIN customers over the years.

 

[DonCampbell]

My recommendation is also to call Park Insurance as well. The coverage they give (including tenant vandalization and 90+ vacancy + rent replacement) is worth its weight in gold. (they can also probably give you a rough rule of thumb to use for your spreadsheet)

 

[Tina Myrvang]

I agree with Don, Park Insurance is great and they work so hard to get you the best coverage and the best price.