If you own rental real estate in Cincinnati you cannot insure that property under a typical homeowner’s insurance policy. In the event a standard home policy is purchased for a property that you do not maintain as your primary and principal residence the insurance company will likely refuse to pay any claims associated with that property, so it’s vitally important that you purchase the correct policy.
The most common policy type available for Cincinnati landlords with 4 rental units or less is the dwelling fire policy. Agents will sometimes refer to such polices as a landlord policy. If you own a building with more than 4 units a commercial property policy form will be necessary.
You can receive a quote from our agency if you live and or own investment property in the states of Ohio, Kentucky, or Indiana, or through our network of agents we work with in all 50 states. Click here to begin your online landlord policy quote request. Please email me at jack@pathwayinsurance.net if you need quotes for apartment buildings with 5 units or more.
Let’s discuss your options for landlord policies in the Cincinnati area. The landlord policy is available in 3 different policy forms:
DF-1 Basic Form- Click here to see what typically is covered under the DF-1
DF-2 Broad Form- Click here to see what typically is covered under the DF-2
DF-3 Special Form- Click here to see what typically is covered under the DF-3
It is important for you to understand the benefits and or limitations of each policy form. If you select a DF-1 policy for your Cincinnati rental because it’s the least expensive option and your roof collapses because of the weight of snow or ice there is no coverage under this policy form. Or let’s assume a water pipe breaks and ensuing damage is caused, no coverage is available under the DF-1. (Read what is covered under the DF-1)
Carefully select the policy that is best for your circumstances and budget. The DF-1 is the least expensive but has the most limitations of coverage while the DF-3 policy offers all risk on your Coverage A (and replacement cost coverage in most cases) in comparison to the DF-1 which only covers 8 different perils. Check your individual policy for complete details. Vandalism or Malicious Mischief may not be automatically covered under the DF-1 with all insurance companies offering rental insurance policies in Cincinnati but may need to be added as an option.
Additionally the DF-1 policy form is settled on an actual cash value basis (ACV) meaning that a deduction for depreciation is taken into consideration when settling your claim.
What does a deduction for depreciation signify? Generally it means the insurance company will determine the value of the property based on an estimated amount of the destroyed item at the time of loss. For instance, if your insurance company considers the life expectancy of a roof to be 20 years and your roof is 10 years old at the time of a loss the insurance company will (in addition to your deductible) subtract 50% from the loss amount!
So if the cost to replace a roof is $8,000 the insurance company subtracts $4,000 because of depreciation and then subtracts your deductible from that figure. (Ouch)
A replacement cost loss settlement only subtracts the deductible. So as you can see replacement cost is a superior option, but the cost is more for this coverage so you should choose your coverage wisely to fit your budget and your circumstances.
To find an insurance company offering low premium rates for landlord insurance policies in Cincinnati click here.
Or if you have a question please feel free to contact me directly by calling 513-662-7000 or sending a quick email to jack@pathwayinsurance.net