Low Cost Landlord Insurance

How to Obtain Low Cost Landlord Insurance

Shop Around and Get Quotes from Different Insurers

Landlord insurance rates will vary greatly from one carrier to the next, sometimes to the tune of hundreds of dollars. Taking time to shop around and get quotes from different insurance companies will often pay off in real dollars.

• Use a broker rather than an agent of a particular company. Unlike an agent, a broker will be able to get quotes for you from different companies.
• Get referrals from your landlord association or fellow landlords. You can also get online quotes for rates from different companies.
• Research the claim history of each insurance company that you consider.

Be sure to do an apples-to-apples comparison by getting a quote for the exact same coverage from the different insurers. This way, you can ensure that you are getting the best deal possible on your landlord insurance.

Maximize Your discounts

Every insurance company will offer various discounts on their landlord insurance policies. These discounts vary in number and dollar value from company to company, and they are not automatically applied to your policy. It is therefore very important to ask your agent which discounts you qualify for.

If an insurer sells auto, home and landlord insurance, for example, you will qualify for a multi-policy discount by buying more than one policy from them. The discount offered can lower your premium by up to 15 percent.

You may also lower your rates if you have security features such as smoke alarms, dead-bolt locks and burglar alarms. Proximity to a fire hydrant or fire station will often help lower your rates.

Use Your Property’s Re-building Cost Rather Than Its Market Value

Make sure your premiums are based on the cost to rebuild a damaged building rather than your property’s market value. Your policy will only cover rebuilding costs. This amount is typically much lower than your property’s appraised value, and thus makes for lower premiums.

Know Thy Coverage

Your landlord insurance premiums vary significantly depending on the coverage you choose to have on your policy. In fact, a landlord insurance policy is actually a package of different coverages – some come standard with the policy, while some are optional.

Before you buy a policy, it is essential to know and understand the different types of coverages available for your property. Carefully assess your insurance needs to help ensure that your property is not under-insured or over-insured.

How Your Coverage Affects the Cost of Your Landlord Insurance

Here are three factors to consider as you evaluate your landlord insurance coverage. They will all significantly affect your insurance premiums.

Your Coverage Options

A comprehensive insurance policy provides coverage for any damage to your property, unless it is specifically excluded on the policy. In contrast, a peril policy will only cover the type of damage that is specifically listed on your policy. Not surprisingly, a comprehensive policy is more expensive than a peril policy.

Liability coverage is another type of coverage to consider. It protects you in the event that an injury or death occurs on your property, particularly if this is due to some defect or other condition of the property.

Your Deductible

Another option that will help you obtain low cost landlord insurance is increasing your deductible. A deductible is the amount that you will pay out-of-pocket, before your insurer pays the claim. The higher the deductible you choose, the lower your insurance premium will be. A $500 dollar deductible is recommended, but you lower your premium by up to 25 percent if you can afford to raise it $1000.

Your Settlement Method

There are two methods offered by insurance companies to pay claims. The first and less expensive option is to select “Actual Cash Value” for the property losses. In this case, depreciation is deducted from the property’s current value before the claim payout is made. If you opt for the more expensive "Replacement Value" option, the damaged property is replaced with no regard for depreciation.

Your Money's Worth

As you shop, keep in mind that you will often get what you pay for. The ideal low cost landlord insurance is a policy that provides comprehensive coverage for your property at the lowest cost.