Home Insurance in Chicago>Question Details

Starrynight1…, Real Estate Pro in Chicago, IL

First time home owner buying home owner insurance

Asked by Starrynight12hk, Chicago, IL Wed Jan 26, 2011

I will rent out my 1000sq ft condo (no furniture inside, only appliances in kitchen). When buying a home owner insurance, how much personal property I should estimate? What is the common amount of coverage?

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11
Robert Lee’s answer
Given the strict underwriting enviroment today it will be hard to obtain financing on a new property if you dont have a current lease. Call several experienced insurance agents who can point you in the right direction.

Good Luck
0 votes Thank Flag Link Tue Mar 8, 2011
Agree with calling your Insurance Agent. Multi-Policy Discount should be given as well!
0 votes Thank Flag Link Tue Feb 1, 2011
I would speak to you Insurance Agent. Also get a copy of the policy the association carries. this will help your insurance agent
0 votes Thank Flag Link Tue Feb 1, 2011
Your mortgager will have a say in you keeping it insured for at least loan value. Your insurance company will raise the policy cost if you don't live there or if it is vacant. Call lender and insurance agent. Buying something else without a lease already will be a problem for mortgage on new property. Very strict on people who want to rent one place and buy another. Huge risk of default on the first place.
0 votes Thank Flag Link Tue Feb 1, 2011
All good advice. I also encourage my rental clients to require in your lease that the tenant has tenant's insurance to cover their personal possessions. It is very inexpensive and they should do it anyway, but as the landlord, they have some coverage if there is a fire or theft, etc.

Also - make sure you are not getting charged for personal possessions on your insurance. It is a standard part of most policies and it may be assumed, unless you bring it up.
0 votes Thank Flag Link Thu Jan 27, 2011
Dear Starrynight,

For the typical property insurance, you'll want to get a "Condo Policy" (which is in some ways just a modified renter's insurance agreement), but you'll want to make sure that it includes a clause or rider that indicates that the property is "rented to others 52 weeks a year."

Regarding how much insurance to get that's entirely up to you. And you may want to investigate additional liability insurance for yourself or for your company that owns and manages your investment property. I'd suggest speaking with an insurance agent who can give you some more specific suggestions about your specific needs.

I use Charles Djordjevich at Allstate. His office number is 312-943-8081.

Good luck to you.

--
Sincerely,

Christopher Thomas
Broker Associate, Keller Williams Realty Chicago Consulting Group
716 E. 47th St. Chicago, IL 60653
(773) 418-0640 (cell) (312) 577-0985 (fax)
cthomas@kw.com
http://www.myagentchris.com
0 votes Thank Flag Link Thu Jan 27, 2011
Let me make sure I have this right, you are buying a condo for the first time, which you do not plan to live in, but will rent out? If you are getting a mortgage, the bank will want you to have an HO6, or Walls In policy. You would need minimal coverage for appliances and flooring, which can be damaged, also painting of walls or damage to wall coverings that can occur from things like leakage. Your tenant can get a renter's policy to cover their content. There might even be a minimum on the coverage for the HO6, so you can check what that is, and quickly add up to see if you think you would be covered.
As mentioned, a liability policy is the smart way to go with a tenant in the property.
0 votes Thank Flag Link Wed Jan 26, 2011
You will be insuring the property and its value, not necessarily the personal property. Personal property insurance should be purchased by the renter. There is a special insurance for them to cover their items within your dwelling. You might want to see if there is some sort of Home Warranty Insurance Policy that you can get for your major appliances, furnace/ac, water heater. I have some references for that if you need them.

Good Luck!
Linda Dressler, Realtor®
0 votes Thank Flag Link Wed Jan 26, 2011
Hello,

As far as insurance coverage on your condo, you will want to call your current insurance agent to let him or her know that you will not be occupying the condo anymore and will need to modify your coverage as there will not be personal property in the unit.

With regards to the common amount of coverage for personal property, most people start with $10,000 of personal property coverage and then add specific coverage for jewelry, computers, etc.
0 votes Thank Flag Link Wed Jan 26, 2011
As an owner renting out your property, you should obtain General Liability Coverage with at least a $500,000 Limit of Liability.
0 votes Thank Flag Link Wed Jan 26, 2011
There is no common amount. It depends on how much coverage you want. Some condo associations require a specific amount while others do not care. Just call a few Ins companys up and ask for quotes. It will not be much either way.
0 votes Thank Flag Link Wed Jan 26, 2011
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