Landlord Insurance

by Mr. Cheap

One of the things every “Starting With Real Estate Investing” book or information source says is to get insurance. Obviously having your investment burn down or getting hit with a multi-million dollar lawsuit would suck. I’ve written before that I’m not a huge fan of insurance (and I really believe if you start buying everything an insurance salesman offers you you’ll be in the poorhouse soon). HOWEVER, insuring against catastrophic loss is what you DO want insurance for. The insurance companies can make money in the aggregate, and you can avoid potentially devastating misfortune.

As I was completing repairs, I started calling agents wanting to buy insurance for the condo. With each one, the conversation went the same way. I’d tell them I’d bought a condo as an investment property, and wanted landlord insurance. They’d ask me who provided insurance for my primary residence. I’d tell them I rented, and didn’t need insurance for my residence, then they’d tell me they couldn’t sell me insurance.

It was very odd.

I’ve had a very few occasions in life when someone just flat out refuses to sell me something that they seem to be offering for sale and it throws you for a loop. I don’t even get angry, just very confused. I asked them who I should be calling to purchase insurance from, if they couldn’t sell it to me, and each of them said they didn’t know.

Finally I lucked out (after calling about 10 agents) and found someone who seemed to understand his business a bit better. He told me he couldn’t sell me insurance for my condo UNLESS I bought tenant insurance too. No problem I said (at this point I was desperate). I ended up getting full coverage for both residences (I’ll never use my rental insurance) for $40 / month, which seems very reasonable to me.

The morals of this story are:

1) Persistence pays off

2) If you want to get insurance for an investment property, get insurance for your primary residence as well (whether you want it or not) to make your life easier

3) Stick with people who know their business / do your business well. The insurance agent who sold me the right product is going to get first shot at all my future business.

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