Are you paying too much insurance on your rentals? Does the cost of insurance eating into your rentals ROI? So here are some recommendation to cut your Home Owners insurance costs without risking coverage:
1) Increase Deductible: Raise your insurance deductible to maximum possible specially
since majority of home repairs would cost you much less to accomplish than your deductible insurance company. In fact, in most case you won’t rely on the coverage to address the minor repairs.
2) Screen like Hell : Most insurance policies have pet riders so screen your tenants like crazy to make sure you avoid aggressive Dog, Snake, …etc that would increase your coverage costs. These kind of pets also expose you to additional risk if your Dog or Snake hurts a neighbor.
3) Avoid Replacement Cost : Most home owner policies have replacement costs coverage which in most cases is not sufficient to cover your re-build. So, don’t pay for it. For instance if you have a 1,000 sqft living space and you are confident that you can re-build by spending $100 per sqft, then you don’t need to buy more than $100,000 of coverage. Anything above that amount is a complete waste of money.
4) Combine Auto, Home, Life: Buying all of your policies from the same company can save you money. the policies from one carrier. Most companies will offer you incentives to bundle Auto, Life and Home polices to get you to buy everything from one company. For instance Geico which aggressively promotes Auto Insurance policy in California does NOT offer home owners polices above $750,000 dollars. In these kind of cases make sure you can NOT buy cheaper policy directly from Traveler’s.
5) Install Safety Equipment: Your insurance company should offer you discounts on any anti-theft investments you make. In addition, States like California now need Smoke and CO2 detectors which would cut your cost of insurance coverage.
Finally, be ready to negotiate and don’t accept the 1st quote the agent provides you. Shop around and make sure you read your policy and understand how in case of a fire, flood how quickly your insurance company can help you get back on your feet.