Buying a Quadplex? Here’s the Insurance You Need Before Closing

Purchasing a quadplex rental property can be a lucrative investment, but securing the right insurance is a critical step before closing. Lenders typically require proof of coverage, and selecting the wrong policy can create coverage gaps, financial risk, or loan delays.

This guide explains the essential insurance you need before closing, common mistakes to avoid, and how Wexford Insurance helps ensure your quadplex is fully protected from day one.

1. Property (Dwelling) Insurance

Property insurance protects your quadplex from damage caused by:

• Fire

• Storms, wind, or hail

• Vandalism or theft

Replacement cost coverage (RCV) is essential because it ensures you can rebuild the property if a total loss occurs. Lenders almost always require RCV insurance for financed quadplexes.

2. Liability Insurance

Liability coverage protects you if someone is injured on your property. For quadplexes, liability exposure is higher due to:

• Multiple tenants

• Shared hallways, staircases, or common areas

• Visitor or contractor accidents

Most lenders expect liability limits of $300,000–$1 million, depending on property size and location.

3. Loss-of-Rental-Income Coverage

Loss-of-rents insurance reimburses lost income if units become temporarily uninhabitable due to a covered event, such as:

• Fire or storm damage

• Vandalism

• Plumbing or structural failures

This ensures your mortgage and operating costs remain covered during repairs.

4. Optional Endorsements to Consider

Depending on your quadplex location and risk factors, additional coverage may include:

• Flood Insurance: Required in FEMA-designated flood zones (Read More)

• Earthquake Insurance: For properties in seismic zones

• Umbrella Liability: Extra liability coverage beyond the policy limits

• Equipment Breakdown: Protects appliances and systems provided to tenants

5. Coverage Pitfalls to Avoid

Common insurance mistakes for quadplex buyers include:

• Using homeowners insurance instead of landlord/multi-unit insurance

• Insuring at market value rather than replacement cost

• Ignoring loss-of-rental-income coverage

• Failing to include optional endorsements for specific local risks

• Assuming tenant-caused damage is automatically covered

Avoiding these errors helps prevent underinsurance and denied claims after closing.

How Wexford Insurance Helps Quadplex Buyers

Wexford Insurance specializes in quadplex and multi-unit rental property insurance. They help buyers:

• Obtain lender-compliant insurance before closing

• Customize coverage for dwelling, liability, and rental income

• Add optional endorsements for flood, earthquake, and umbrella coverage

• Ensure coverage protects your investment and tenants

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Final Thoughts

Before closing on a quadplex, securing proper insurance is critical for protecting your investment, satisfying lender requirements, and avoiding costly coverage gaps. Working with a specialist like Wexford Insurance ensures your policy is accurate, comprehensive, and tailored to your multi-unit property.

Contact us today.

FAQs

1. What type of insurance is required by lenders before closing on a quadplex?

2. How do I file a quadplex insurance claim if tenants cause damage or a loss occurs?

3. Should I insure my quadplex for replacement cost or market value?