Ask any property owner who’s been around the block, and they’ll likely share a story about a fire, flood, or lawsuit they’ve dealt with on their real estate — it’s simply a cost of doing business.
Personally, we’ve seen owners lose everything because of a lack of insurance, which only reinforces the importance of getting properly covered.
Getting an insurance quote as a property owner is no simple task, since no two properties are alike, and most owners have seen their premiums increasing steadily across the board. The average landlord pays almost 15-25% more on insurance compared to the average homeowner’s policy, and with current market trends, rates are almost certain to keep rising.
Fortunately, Pennsylvania is considered a lower-cost state for landlord insurance, with a median cost of $988 per property. Below are some proactive steps landlords can take to lower their insurance costs on rental properties.
- Updated Safety Features: Make sure key safety features are in place before renting a unit. Smoke and carbon monoxide detectors, sprinkler systems, fire extinguishers, and security systems are just a few of the options that can lead to reductions in insurance and liability. The more modern the features, the better — smart tech in this area can pay for itself within the first year.
- Requiring Renters Insurance: Although not legally required, it’s a great idea to require tenants to carry renters insurance. This reduces the owner’s liability for tenants’ personal property, which in return leads to reduced costs on the owner’s building insurance.
- Use Professional Maintenance: Having licensed professionals perform maintenance on your property provides comfort that the work is being done properly. It also reduces liability for the owner if anyone is injured during maintenance, or if the maintenance causes further problems.
- Multi-Property Insurance Policies: If you own multiple rental properties, contact your insurance provider to see if a discount is available for insuring all of them under one agency — sometimes referred to as a “Master Landlord Insurance Policy.” Most agencies take loyalty seriously and will work out deals to insure multiple properties at once.
- Think Third Party: If you have a property used for short-term rentals, layer it with coverage from a third party. VRBO and Airbnb offer liability policies and limited damage protection for owners who list on their platform. Some carriers will only cover a property that uses third-party sites for bookings, so knowing what platforms you use can make the difference between having a provider willing to cover you at all, or at significant savings.
Watching your insurance policy isn’t just a cost-saving measure — it can be a portfolio-saving measure over the long term, so make sure you’re well covered for all of CRE’s ups and downs.
