Savings Strategies: 7 Ways to Reduce Your Landlord Insurance Bill

Landlord insurance provides valuable coverage against potential financial setbacks associated with rental properties, ensuring peace of mind for both you and your business.

In this comprehensive guide, we'll explore the average cost of a landlord insurance policy and unveil seven practical strategies to help you lower your annual insurance premiums. Whether you're a seasoned landlord or just starting in the rental business, these tips will empower you to make the most of your insurance policy without breaking the bank.

Why is Landlord Insurance Essential?

While landlord insurance is not mandatory, many homeowners are unaware of its numerous benefits. To ensure you're protected in case of any unforeseen events with your rental property, having the right kind of insurance is crucial.

Instead of standard homeowners insurance, switching to landlord insurance is a smart move. When selecting your landlord insurance policy, there are several actions you can take to reduce the cost of your premium while maintaining comprehensive coverage.

Understanding the Average Cost of Landlord Insurance

Typically, landlord insurance costs approximately 25% more than homeowners insurance. For instance, if homeowners insurance for a property amounts to $1,800, the corresponding landlord insurance for the same property, when used as a rental, would fall in the range of approximately $2,200 to $2,230.

It's worth noting that landlords can include insurance premiums in the overall expenses of their rental property. This premium is deducted from the rental income landlords receive from tenants. In 2023, some states with the highest landlord insurance premiums included Louisiana, Florida, Texas, and Colorado.

Types of Landlord Insurance

Landlord insurance policies come in three types, known as dwelling policies, each offering different levels of coverage and associated costs:

Dwelling Policy 1 (DP-1):

This is a cost-effective option with limited coverage, protecting against specifically listed risks. Claims are typically settled based on the actual cash value, which factors in wear and tear.

Dwelling Policy 2 (DP-2):

Offering broader coverage, DP-2 is more expensive but doesn't require specific risks to be listed. Claims are paid on a replacement cost basis, excluding deductions for wear and tear.

Dwelling Policy 3 (DP-3):

DP-3 is the most comprehensive and expensive option, covering all risks except those specifically excluded. Similar to DP-2, claims are settled on a replacement-cost basis.

7 Tips for Lowering Landlord Insurance Costs

While several factors influence landlord insurance costs, including claims history, construction type, occupancy, and more, there are seven factors within your control that can help you secure a more budget-friendly quote:

1. Property Maintenance:

Regular maintenance keeps your property attractive to both insurance companies and tenants. Prioritize prompt repairs, address wear and tear, maintain walkways, and ensure fire escapes and smoke detectors are functional.

2. Increase Deductible:

Raising your deductible significantly reduces insurance premium costs. However, remember that a higher deductible means more out-of-pocket expenses if you need to file a claim.

3. Emphasize Safety:

Highlight safety measures such as security cameras, lighting systems, alarms, and smoke detectors to improve your property's safety profile and potentially earn discounts.

4. Explore Discounts:

Inquire about eligible discounts such as multi-property discounts, alumni discounts, veterans benefits, and more. Maintaining a good insurance score can also lead to lower insurance quotes.

5. Upgrade Core Elements:

Upgrading plumbing, heating, and electrical systems can lead to policy upgrades that benefit both you and your tenants.

6. Get a Master Landlord Policy:

If you own multiple properties, consolidating them under a single policy can streamline management and potentially lead to lower insurance premiums.

7. Consult Trusted Providers:

Seek out experienced landlord insurance providers who understand the market and can offer competitive premium rates tailored to your needs.

For quick and reliable landlord insurance solutions, consider consulting trusted providers like Steadily. Their dedicated team of landlord insurance experts can offer competitive quotes with coverage starting as early as the next business day.

Lowering your landlord insurance costs is possible with these strategies, providing you with financial protection while maximizing your investment's potential. Protect your rental properties without breaking the bank by implementing these smart savings techniques.