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elanzillotta

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Posts: 9
Reply with quote  #1 
I'm about to shop around for new property insurance for 4 rental properties in CA. What is the standard name for these types of polices. Do I need to a standard homeowner's policy with a renter's rider amended to it? Also, from personal experience, are these policies more expensive? I've had these rentals for over 4 years and never really looking into the insurance aspect of my rentals!! I o know that I have a $1,000,000 liability limit and a higher ded. to offset such high limit.

Any feedback is well appreciated


Eric L.

You Deserve What You Accept
OHlandlord

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Posts: 3,814
Reply with quote  #2 
You do not want a homeowner's policy.  You want a policy to cover investment (rental) property.  (I don't know what name they give it, but tell the agent you are looking for insurance on rental property.)  This will be less expensive than homeowner's insurance since it doesn't have to cover any of your possessions.  Have you been carrying homeowner's insurance on these all this time?  You may have spent a lot of money you didn't need to and if there was a claim, the insurance company may not have paid off.  Homeowner's insurance is for owner occupied properties, not for rental properties.  My rental insurance runs about 60% of what my homeowner's insurance does.

You do want an umbrella liability policy for at least $1 million and you may consider a loss of income rider on this policy (in case the unit becomes uninhabitable.) 
elanzillotta

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Posts: 9
Reply with quote  #3 
Sad to say but yes I have carried regular home insurance on all of these during the past years! No use in crying over spilled milk at this point. I'll make sure to get the applicable insurance product this time. And yes, I do currently carry a $1 million umbrella- it's a must have in this litigious state.

Thanks!!

Eric L.

You Deserve What You Accept
CaliValleyLL

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Posts: 5
Reply with quote  #4 
Great question and answer! 
nikster87

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Posts: 11
Reply with quote  #5 
I posted a question yesterday about renting our own home out and came across this question. We recently were called by our insurance company and they said that they had to add extra coverage to our policy since they found out it was a rental. Our insurance payment almost doubled. Is this right? I'm a little surprised at the posts that read that our payment should have gone down.
OHlandlord

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Posts: 3,814
Reply with quote  #6 

This really depends on the area where you live, the insurance rates in that area, the amenities on the property, and the type of insurance you have.  Your rental rate can be higher if you have something on the property that the insurance company would deem a possible liability problem (a pool, near a lake, tenant's dog, an older house in need of updates, stairs without railings, etc.)  Rates are higher on rental properties in some areas of the country.  You also want to be sure they have the insurance policy turned over to a rental insurance policy that no longer covers your personal property in the rental (with the exception of the appliances, furnace & A/C system).  It should not be a home owner's policy with a rental rider.   It should be converted to a rental dwelling policy.

Check with your insurance company on this.  Ask them how you can lower the rates.  You may be able to do some simple things to lower them (fence & lock the pool, fence the yard, put in smoke detectors, etc.)  If they are still high, shop around for lower rates.  Some insurance companies just have higher rates than others because they have insured areas of the country that have had high rates of claims (like N.O. after Katrina) and they are making up the difference with other customer's rates.  Personally, some of my rental policies are several hundred dollars lower than home owner's policy even though the houses are about the same size.  I have State Farm insurance.  My rental rates are lower, and that includes a rider for lost rents from a catastrophe.  Call the company, then shop around.

One last thing, you can get discounts if all your policies are from the same company too.  Car, home, rental, etc. all from the same company will give you lower rates too.

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