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May 4, 2022

Expert Advice: How Can You Lower the Cost of Landlord Insurance

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Steadily's blog cover page for information around landlord insurance.

Landlord insurance is a policy specifically designed for rental property owners and investors. Similar to homeowners insurance, this policy providers coverage for your dwelling, liability for the landlord, and loss of income. The cost of landlord insurance is typically 15-25% more than a traditional homeowners insurance policy. The average cost of landlord insurance is $1,680 annually, but this can vary greatly depending on a number of factors, such as the age of your property, state, claims history, and more.

So, how do you lower the cost of landlord insurance? We asked the experts to weigh in.

Shaun Connell, Founder of Rental Property Calculator

In my opinion, you should get landlord insurance from someone who specializes in this type of real estate. Combine multiple places with a single policy. When building owners put different properties on the same policy, they can often get better rates. There is a risk that separate policies will not get the credit they deserve. A master policy lets owners see all the properties that are covered by their own policies. You should get credit for making new systems that work better than old ones. In the insurance business, newer is better, so make sure your insurance provider knows about building upgrades and repairs. There are a lot of things that can make a person less likely to get into trouble, like making major changes to the heating, electric, and plumbing systems. This could lead to better prices and longer terms when it comes time to renew insurance. Add safety-related changes to the building's profile. Make note of all the things that have been done to make the property more safe. Alarm systems, security cameras, a doorman, and better lighting can all make your home look better to an insurance company.

Marc Stitt, Chief Marketing Officer (CMO) at FMX

Review your building valuations regularly. Many different factors, in my opinion, go into determining landlord insurance premiums, including construction type, replacement cost, number of units, claims history, housekeeping, occupancies, and exposures. Insurance companies also look to see if a structure complies with current building codes. While some of the factors influencing landlord insurance premiums are beyond the owner's control, the following suggestions can assist building owners in negotiating the best rates for their insurance policies. Labor and material costs fluctuate over time. Discuss co-insurance, actual cash value, replacement cost, and current rent rolls with your insurance broker for loss of income exposure. Estimate the cost per square foot to rebuild the building in the event of a loss by taking into account all of the factors.

Jasen Edwards, Chair of the Agent Editorial Board and Published Author of Agent Advice

Landlord insurance protects the property in case of any misfortunate events. It also covers accidents that happened within the property. This, for me, is more practical than having nothing at all. It will save you from all the significant expenses incurred during damages brought by natural calamities and accidents. However, it is often costly, but here are ways to lower your landlord insurance:

  1. Get bundle insurance. Most insurance companies offer massive discounts if you get two or more products with them. You can you landlord insurance plus auto insurance so they can give you a better price.
  2. Perform preventive maintenance on your property. This is to ensure that your property is safe. Do a routine check starting from the wires, pipes, and up to the home's whole exterior and ensure that they will not cause accidents in your location. Because if the insurance company finds out that your property is not well maintained, they will certainly give you a higher amount of premium to pay.

Leonard Ang, CEO of iPropertyManagement Leasing

While landlords often can't do very much about the insurance risk of the neighborhood in which their property sits, they can control the risks directly associated with those properties. Focusing especially on meeting code for fire, disabilities, and other issues is an essential first step here. Beyond that, security cameras and other devices are going to do a lot to effectively assign responsibility elsewhere wherever possible.

Steve Schwab, CEO of Casago

One of the best ways to save money on landlord insurance is by increasing your deductible. Typically the deductible for any type of building or property is about $1,000. A landlord can reduce insurance premium by 8-10% just by increasing the deductible to $2,500. While a large deductible might not be the right move for every landlord, it's a great option for many!

Insurance companies rarely offer the same type of discounts on landlord policies as they do for auto or homeowners insurance. There are still some steps that a landlord can take to help lower the cost of insurance.

First of all, you can install safety devices. A prime example can be hard-wired burglars and fire alarms. I personally prefer carbon monoxide detectors and child safe windows to provide more safety and security to a tenant.

If you own more than one property out on rent, the insurance company can be inquired about discounts on such properties. But, keep in mind that this is only possible for insurance policies from the same company. You should also avoid making claims for small items that may lead to an increase in landlord insurance rate.

Anything you would add that has helped you save money on your landlord insurance? Tweet us @SteadilyInsure #Steadily to share your thoughts.

This post is for informational purposes only and does not serve as legal, financial, or tax advice. Consult your own legal, financial, or tax advisor for matters mentioned here. Steadily is not liable for any actions taken based on this information. If you believe any of this information may be inaccurate please contact us.

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