Every insurance company has their own underwriting requirements for landlord insurance. Some Insurance companies only write to replacement value. This could be a moral conflict when you are buying a 2 unit for $200,000 and the replacement value is $523,000! But that is their underwriting rules for landlords.
Many insurance companies for real estate investor’s then will say, we need at least 50% of replacement value. The reason is they are now getting a little more premium for your landlord risk. Still other real estate investor insurance companies will just write “market value” or what you are buying it for.
Fortunately, we represent every type of these landlord insurance companies. So not a one-size-fits-all solution for rental real estate but a advisor of what your risk is and what you are comfortable doing as a real estate investor. So you can see, not all insurance companies are equal in underwriting risks.