Why is Owner Occupied More $ ?

[Todd Preston]

Hi Friends,

I'm not a PC guy , but i had a conversation with an agent who told me that Owner Occupied (Wind, Hazard and Property) insurance is MORE than if i was renting the property out.

I got an email into him but i wanted to know...Why is this?
Why is OO more money than Rental Non-Owner occupied?

thanks for your input.

 

[jlanier]

There are several reasons for this and it is not ALWAYS the case. On a homeowners policy there are other coverage limits built in such as personal property. Also, homeowners policies tend to be more comprehensive with a broader spectrum of perils as opposed to most "named perils" rental policies. Also a lot of rental policies are paid on an actual cash value basis as opposed to a replacement cost homeowners policy.

 

[munson]

There are several reasons for this and it is not ALWAYS the case. On a homeowners policy there are other coverage limits built in such as personal property. Also, homeowners policies tend to be more comprehensive with a broader spectrum of perils as opposed to most "named perils" rental policies. Also a lot of rental policies are paid on an actual cash value basis as opposed to a replacement cost homeowners policy.

What is said here is correct but most of the time a DP3 policy is less expensive than an HO3.