7 Tips to cut down your Landlord Insurance Premium

7 Tips to cut down your LandlordInsurance Premium

Owners of Rental homes, Apartments and condos can lower their Landlord insurance premiums by drafting down a “Building Structure Profile” for the insurance company. The Building Structure Profile is nothing but a presentation to the insurance company that the building is a low risk property for the insurance company to insure it.

There are different factors to be considered in determining the premiums for landlord insurance, including type of construction, replacement cost, number of units, claims history, housekeeping, occupancies and exposures. Insurance companies also check whether a building complies with current construction codes & all legal clearances.

There are some of the variables that influence landlord insurance premiums way outside the owner’s control, the following tips can help building owners negotiate the best rates for their insurance policies.

1. Maintenance of the property. Keep sidewalks without any major cracks. Make sure the proper handrails and fire exits are installed. Get the façade repaired. Eradicate any mold. In addition, the following measures can make a building more eye catchy to insurance companies:

·         Hard-wired smoke detectors

·         Closed fire doors with panic hardware

·         Child-safety window hardware

2. Increase the deductibles. Increasing the deductible is one of the easiest ways to control premium costs. This is the amount that the building owner would pay out of his pocket, before the insurance company would cover any claims expense. The deductible should be raised to a level that will discourage indiscriminate claims, typically around $2,500. The premium money saved can be put into a fund to self-insure any small claims.
3. Include safety-related improvements in the building structure profile. Make note of all measures taken to enhance the safety of the property. Alarm systems, security cameras, the addition of a doorman, and improved lighting can all make your property more appealing to an insurance underwriter.
4. Building valuations to be monitored regularly. The costs of labor and materials change over time. Discuss with your insurance broker the issues of co-insurance, actual cash value, replacement cost, and current rent rolls for loss of income exposure. Consider all the factors in estimating the cost per square foot to rebuild the building in the event of a loss.
5. Get credit for newer systems. Newer is better in the insurance industry. Advise your broker of building upgrades and repairs. Upgrades to major systems, such as heating, electric and plumbing, can greatly improve a risk profile, which may lead to better pricing and broader terms when it comes time for renewal quotes.
6. Combine multiple locations with a master policy. Often, building owners can negotiate better rates by scheduling different properties on a single policy. Separate policies run the risk of being overlooked or not getting the proper credits applied to each. A master policy allows owners to view all properties scheduled with their respective coverage.
7. Use an insurance broker who is a specialist in real estate. An independent, experienced broker is not obligated to a particular insurance company and will hard on the owner’s behalf. He or she will know the various markets and can present a property to many insurance companies that will compete for the business. Find someone who will work on your behalf year-round, ensuring that you receive the best protection at the lowest rate – not an agent who simply sends a bill at the time of renewal.

Lower landlord insurance is a Great thing, but cheaper insurance is not always better. The insurance broker and building owner should work together all year long to present the property in the best light and to keep the property’s risk profile up to date.
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