Landlord insurance isn’t a luxury item. You’ve got to have it so that you and your property are protected against the big disasters that can hit at any point. Lightning, fire, theft, and lawsuits are just a few things that can go very wrong. But paying your insurance premiums can be painful, especially if you’re in between tenants and not receiving any rental income.
You can’t avoid insurance (please don’t try) but you don’t have to pay too much, either. With just a few small changes, you could lower your insurance premiums and dread the expense a little less. Take a look at all the ways you can lower your landlord insurance costs.
Note: For specific questions about insurance coverage for your rental, please talk to a qualified insurance agent.
Increase Your Deductible
This one is probably the most obvious, but it can definitely help lower your insurance costs. If you don’t file a lot of claims or you have plenty of savings for potential problems, consider increasing your deductible to the highest amount you can reasonably afford. Which means don’t make it so high that a single claim would cause serious financial hardship.
Take Safety Precautions
Before you rent your property, make sure there are working carbon monoxide and smoke alarms throughout the home. Consider adding a home security system with a direct connection to emergency responders. Depending on the type of property you rent out, you may want to invest in a sprinkler system. These safety precautions not only lower the risk of a big claim, they may lower your premiums, as well.
Perform Maintenance and Inspections
The best way to keep your costs down is to prevent problems before they happen. Every property should undergo an annual inspection. While you may think of this as a time to spot problems the tenants have caused, think of it as a way to find problems before they become claims. Check the roof, electrical, HVAC, plumbing, decks and patios, balconies, and anything else that could present a hazard to the tenants or the property. If you’re unsure what to look for, hire a professional inspector to do it for you.
Renovate and Upgrade When Possible
Your insurance premium will be higher if your roof is 15 years old than if it’s a year old. Building standards and codes have changed a lot over the years. Upgrades you make now may cost up front but will save you money long term, including on your insurance premiums. Add a fence, replace the roof, or upgrade plumbing or electrical that is outdated or potentially dangerous.
File Fewer Claims
Your insurance is meant to be there for you when a disaster strikes. Use it when you need to. That being said, you may want to consider when to file. If the damage is approximately what you’d pay in your deductible, it may be easier to handle it yourself. Some water damage claims can lead to higher coverage or being dropped because of the threat of future mold.
Review Your Policy
Every year, sit down your insurance agent and go over your policy. Has the value of your property gone up or down? Did you make renovations that you forgot to tell the insurance company about it? Do you qualify for discounts if you bundle multiple policies under one company? These are worth looking at to make sure you’re not overpaying for your insurance.
If you’ve got questions about buying landlord insurance or your current policy, talk to your insurance agent. When you’re ready to have help maintaining and managing your rental, contact us at ERA American Real Estate. We can help take some of the stress and hassle out of being landlord.
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