How To Determine Insurance For Your Deals

So, you’ve found a property that you are considering purchasing and want to run the numbers on it to make sure that your offer makes sense financially.

If you are using the deal analysis system we provide to our Real Estate Investor Bronze Members or a similar tool that calculates your cash flow on the property, you will need to know the cost of insurance for the property. While experienced investors can usually quickly determine a ballpark estimate of what insurance will be based on properties they’ve already purchased, new investors will often wonder what number to use.

Insurance for a rental property is not usually the same as it is for the property that you live in yourself, so if you happen to live in a similar home, using your own home’s insurance numbers may not be a good idea.

I wish I could tell you a great website that you could go to in order to find insurance quotes for estimating rental property insurance, but I do not know of one. Perhaps, one of our readers will share one with me by posting a comment below and I can update this article with that information.

To make matters worse, a couple of months ago I saw a report on insurance prices that confirmed what I had long believed to be true: insurance rates vary widely depending on the company you buy from. How widely? If I recall the report correctly, prices for the same policy varied from several in the $500 range to several in the low $2,000 range with dozens of data points. All for the SAME coverage!

So, the best way I know of for getting insurance quotes for your rental properties is to actually pick up the phone and call several insurance agents to get quotes. Furthermore, I encourage you to do this process with each property so that you can keep your pricing competitive. I’ve been lazy in the past and relied heavily on my one or two “go to” insurance companies, but I really should be aggressively comparing rates in order to save money where I can. I do have this task on my “to do” list, and recommend that you make a regular habit of pricing insurance with different companies every time that you pick up a new property.

Until my next post,

James

P.S. I have special, time and money-saving forms for requesting insurance quotes that we give as a tool to our Real Estate Investor Bronze Members. This is just one small benefit of becoming a Real Estate Investor Bronze Member today.

Related posts:

1. Insurance Quote Worksheet For Property Insurance on Rental Properties When I was first writing our deal analysis interface that generated the full 4 page...
2. Keeping Property Insurance Rates Low – Getting Quotes on Multiple Properties Insurance quotes on properties can vary widely from one insurance company to another for the...
3. How To Determine The Value Of Your Deals New investors often struggle with how to determine the value of a real estate deal....
4. Use Property Insurance Reports To Track Property Insurance With one or two properties tracking insurance is pretty straight forward and easy to remember,...
5. How To Determine Rental Rates For Your Deals The real estate deal analysis I do is heavily dependent on the income each property...
6. Insurance And Buying Houses Subject To You will need to find a great local insurance agent that understands what you are...
7. How does property insurance help protect me as the lender? We are in the home stretch of questions from the private lending FAQs series. Today,...
8. Repairing Your Rentals: Is Flat Rate Pricing Better? As your rental properties come due for maintenance and occasionally you get ambushed with emergency...
9. How does title insurance help protect me as the lender? This is the penultimate question from our private lending FAQs. The question is: How does...
10. The Right Way To Verify Contractor Insurance First, before I begin, I want to stress that only a very, very small percentage...