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Return To: Landlord Insurance – The Ultimate Guide
“How can I save money on landlord insurance?” If you own any rental properties, one of your largest expenses is insurance.
Rental Property Owners often make HUGE mistakes when looking to reduce their insurance premiums. In order to lower their premiums, landlords will look to lower the insurance amount of the dwelling, lower liability limits, and even downgrade the actual coverage form and type.
These changes may offer a slight decrease in premium, but they will end up costing you in the long term.
In this article we will show you the best ways to save money on your landlord insurance THE RIGHT WAY.
How Can I Save Money Landlord Insurance?
The best way to save money on landlord insurance is to follow these simple steps:
- Increase The Deductible On Your Landlord Insurance Policy
- Pay Your Rental Property Insurance Annually
- Make Sure Your Property Is Updated And Well Maintained
- Do Not File An Insurance Claim Unless It Is MAJOR
Save Money By Increasing The Deductible On Your Landlord Insurance Policy
The quickest and easiest way to save money on landlord insurance is by increasing your DEDUCTIBLE!
The most common deductible for any type of building or property is $1,000. A landlord can reduce insurance premium by 8% – 10% IMMEDIATELY by simply increasing the deductible to $2,500.
If a rental property owner increased the deductible from $1,000 to $5,000, the insurance premium would be reduced by 12% – 15%.
Choosing the right deductible is a very personal decision! A large-deductible may be the right move for one landlord, but wrong for another. We advise clients to pick a deductible that would “hurt” a little to come up within an emergency, but not so high that you would be unable to handle.
Save Money By Paying Your Rental Property Insurance Annually
How you pay your insurance premium matters to some companies!
The second easiest way to save money on rental property insurance is to pay your insurance premium ANNUALLY.
Insurance Carriers have statistical data that shows that clients that pay insurance premium annually (or “in full”) share two really positive characteristics.
- Annual Premium Payers File Less Claims
- Annual Premium Payers Stay Longer As Clients
The PERFECT insurance client (in the eyes of insurance companies) are those the pay premiums on time, do not file claims, and keep their policies for a long time.
To reward, and incentivize, this behavior…many insurance carriers will offer a Pay In Full Discount.
This discount is not offered by every carrier that writes Landlord Insurance, and the discount may vary for the ones that do…but generally, you can save 2% – %4 on your annual premium by paying in full.
Save Money By Making Sure Your Property Is Updated And Well Maintained
Insurance for rental properties is harder to find than normal home insurance.
That is the main reason that Landlord Insurance is more expensive than homeowners insurance!
The Law of Supply And Demand works in the insurance world just like it does in every other facet of life.
There are not as many Insurance Carriers that are willing to provide insurance to rental property owners, therefore the carriers that do only want the BEST Risks.
If you want to save money on landlord insurance, you need to be with the right insurance carrier.
In order to be considered by the carriers that offer the most competitive Landlord Packages, at the most competitive premiums…your rental property needs to be ABOVE Average.
Pay Close Attention To The Following:
- Roof Age Less Than 20 Years Old
- HVAC Updates within the last 10 years
- Electrical Updates within the last 20 years (no Fuses)
- No Plumbing Issues
- Well Maintained Exterior & Interior
These are minimum standards for your property to be considered by the best carriers.
Save Money By NOT Filing An Insurance Claim Unless It Is MAJOR
We covered the need to have a properly updated and well maintained property, but insurance carriers want to make sure that YOU (the landlord) are a good risk as well!
While different carriers will look at different criteria for each landlord (credit history, pay history, experience as a landlord), one of the main factors they look at is YOUR Insurance Claim History.
Statistics shows that rental properties have more claims than owner occupied (homeowners) properties.
In order to save money on rental property insurance, it is imperative that the owner has no claims…or at the least MINIMAL claims.
While insurance carriers understand that insurance claims are part of the deal, it is important for owners to use insurance as it is intended to be used… for major claims!
Too often property owners use insurance more as a maintenance plan. This drives the loss experience UP which simultaneously driving carrier choice down and premiums UP.
Landlords should only file claims when they have no other choice!
North Carolina Landlord Insurance Agency
If you are a Landlord that owns property in North Carolina, feel free to reach out to ALLCHOICE if you have any questions about insurance for your rental property. We are a local, independent insurance agency that gives you the best value to take care of all your insurance needs. Contact Us today or request a Free Landlord Insurance Quote.