5 Ways to Lower Insurance Costs on Your Rental Property
If you’re looking to rent out your home or another property on a frequent basis, basic homeowners insurance won’t cut it and you’ll probably need to upgrade to landlord insurance or rental property insurance. However, this upgrade doesn’t come cheap — expect to pay about 15 to 30 percent more for a landlord policy. Despite the increased costs, there are still things you can do to appease your insurance company and reduce your premiums. Here are a few ways to cut back on your landlord insurance premiums.
1. Bundle your insurance plans
Insurance companies will likely give you a sizable discount if you bundle all your plans together. Combine your home, rental and auto insurance to get a multi-policy discount for a less expensive, all-inclusive price for everything.
2. Increase your deductible
Rental property insurance is more expensive for a reason. With short-term renters, there’s greater risk involved and therefore greater expense to insure. Opt for a higher deductible to get lower monthly premiums if you’re comfortable with the amount of risk involved. This higher deductible may even be beneficial. Premiums rise with the number of claims you report, and if your deductible is on the higher end, you may be forced to handle issues on our own before turning to insurance.
3. Don’t file unnecessary claims
If you habitually turn to insurance to cover low-cost fixes you could be handling on your own, you might be needlessly increasing your premiums. With each claim you file, you run the risk of hiking your premiums or even being dropped by your insurance company. Calculate the cost and benefits of each repair, and perform your own fixes wherever possible to stay on your insurance company’s good side.
4. Make safety upgrades
Your rental property can qualify for additional discounts by implementing a wide variety safety upgrades. Adding a home security system, replacing door hinges and installing better locks and deadbolts tells your insurance company that your property is protected against burglary and break-ins. Many home protection systems even offer deductible reimbursements. Flo, for example, will put $2500 toward your insurance deductible on any water damage claim in your home. Ask an agent what discount-eligible upgrades can be made to your rental. Some of them are as easy as adding smoke and fire detectors, while others, like rewiring the house or adding storm shutters, require professional installation. Feel free suggest a few upgrades of your own — it may secure you a discount!
5. Add eco-friendly upgrades
If you outfit your rental with energy-efficient appliances and upgrades, you may qualify for state and federal rebates in addition to discounts on your insurance premiums. For example, solar energy is extremely energy-efficient and cost-effective over time, and depending on state, you’ll be eligible for everything from deeply discounted financing on the panels to full property tax exclusion for the year. If water conservation matters to you, installing a Flo at your rental won’t only help reduce usage, it may also save you up to 10 percent on your premiums each year.