Feb
2
Home Insurance for Unoccupied Investment Properties
February 2, 2007 |
Took care of assorted nuts and bolts business today, including getting some quotes for home insurance on the 1002 S. Main house. I was a little surprised at how high they were, as I was expecting them to be about what I’ve paid for insurance for policies on similar homes in the past.
Policies apparently run a bit higher for unoccupied investment properties, as they have to tack on extra charges for fire protection, since not only will work potentially be occuring that could increase the odds of a fire, but the nature of being unoccupied itself means that a small fire that would normally be caught and contained by a homeowner can quickly spread in an unoccupied property.
I also wasn’t sure about whether I needed coverage for the mortgage amount only or for a higher amount, closer to what the property would sell for after being rehabbed. The quote I got was for the latter but I need to do more research into that, moving forward.
We’ll likely go with the quote from AllState, which was $775/year as we’ve used them for years and have been happy enough, and the short term nature (hopefully) of this first project makes me not inclined to get too bogged down in obsessing over the home insurance side of thing and continue shopping around, etc.
Comments
1 Comment so far
Generally you need to get a builders risk policy when you are rehabbing an unoccupied property. The policy should cover the ARV not just the mortgage - otherwise you will lose your sweat equity.
I’m surprised at the high price quote from Allstate, but you didn’t mention the $ amount of coverage. I use Allstate and they have been very competitive.