Getting Killed on Property Insurance on Rentals.

[Alfred Litton]

I'm at my wits' end looking for decent property insurance for my rentals (four SFHs). My rates have spiked 35% in the past 2 years. Is this happening to everyone else as well? I'm paying about $1000/yr each on homes valued at around $110K apiece. I've been shopping around a bit, but no luck. I realize we can't solicit here, and I'm not looking for that, but does anyone have any tips on how to seek out the least expensive homeowners insurance for rental properties? Am I missing something? Or are my rates and the recent premium spikes what everyone else is seeing as well? Thanks all!

[Laura Williams]

@Alfred Litton

A couple tips I can give you is to ask your insurance company if they give utility discounts for things like new roofs, HVAC systems or redoing plumbing, electrical etc. On some of my properties I own I did extensive rehabs (bought crappers and fixed them up) and the insurance company I use gives big discounts for redoing these items. They never offer to tell you about these programs ...you have to ask. On the houses I qualified for the utility discounts on it cut my insurance bill in half from what I was paying before. So if you’ve redone any big items or bought turnkey where that work was done & you can get the contractor to sign off on it you might could wrangle a better price.

Another thing you can look at that might save a little bit is getting a blanket liability policy to cover all your properties. State Farm has one in my city for $250/year that covers up to 25 properties for 1 million each in liability.

There are also wholesale insurance companies where you can get discounts on home insurance buying in bulk. I know a couple investors who own 100+ properties that were able to get significant savings verses buying from the local companies like State Farm and Farm bureau etc. I think they told me they saved around 30% from what they were paying before. The only thing is you need quite a few properties to get the discounts but one company I spoke with told me I could partner with other investors and we all go in together. So that might be something to look into if you have friends or family who own a few properties that you could go in together on the same policy.