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Reducing the costs of your investment property insurance

Reducing the costs of your investment property insurance

If you have a rental home, it is important to have investment property insurance. This will protect your investment in case there is damage to the property due to perils such as fire, vandalism or theft. You are also protected against liability if someone is injured in your property. However, the cost of this insurance adds to the cost of owning the home. Considering it is a rental property, the higher the profits the better. The way to achieve this is to reduce the cost of the insurance.

Below are some strategies you can use to reduce the cost of your investment property insurance.

Compare insurers

Shop around by comparing different insurer’s quotes and policies. This way you will find the most suitable coverage for you and at the best price. You should ensure that you get a few quotes and compare them. You may also talk to an insurance agent for leads. Note that some insurance companies specialize on rental properties and you should compare the rates and coverage they provide with what other insurance companies are providing.

Get a higher deductible

If the deductible is higher, your premiums will be lower. Increase the amount of deductible to reduce the amount of premiums that you pay. The word of caution is that you should choose a deductible that you will afford in case a disaster takes place.

Consider the discounts

Discounts help to reduce the amount of premiums that you pay. When looking for an insurer, enquire about discounts provided. Some of the discounts are on houses with alarm systems, detectors and deadbolt locks. Roofing that can withstand wind damage and hail can get discounts and so is having particular tenants such as elderly people and moms who stay at home. If you have insured more than one property with the insurer you may get a discount and if you have not filed claims for a while. It is always good to check with the insurer to find out the available discounts and if you qualify. This can help you to lower the cost of your investment property insurance.

Insure house’s value

Only insure the value of your house and not the value of your property. The houses value is less than the property’s value and therefore it needs lower premiums to insure. In addition, you do not need to insure the land. You can also opt not to keep any of your personal possessions in the property to avoid insuring them. Recommend the tenants to insure their possessions using renter’s insurance. This way, your premiums will be lower.

Monitor your credit score

A high credit score means that you may get lower premium rates for your insurance. Monitor the credit score and always ensure that it is good.
Assess all the ways you can reduce your premiums so that your insurance cost will be down for a larger profit.

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