When you own a rental second home, homeowners insurance doesn’t go away. Additionally, insurance premiums tend to increase over the years. Whether you are shopping for homeowners insurance for your rental home or looking to decrease your premiums for the rental home you already own, here are a few tips to help you make your insurance more affordable.
IMPROVE YOUR SECOND HOME SECURITY
By decreasing vulnerabilities in your rental home, you can potentially cut your insurance premiums by as much as 15-25 percent. Methods for improving rental home security can include adding a smoke detector, burglar alarm, dead-bolt locks, sprinkler system, and professionally installed storm shutters and doors.
With these added safety measures in place, your rental house is less likely to receive damage from unforeseen instances such as storms, floods, fires, or burglary. If you do make these safety upgrades to your rental home, keep a record of your receipts in case your provider wants proof before lowering your premium.
UNDERSTAND YOUR RENTAL HOME LOCATION
If you haven’t bought your rental home yet, check the CLUE (Comprehensive Loss Underwriting Exchange) report of the rental home you are interested in. These reports will be able to tell you the property’s insurance claim history so you can be familiar with any problems the house has had.
INCREASE THE DEDUCTIBLE
A deductible is the amount of risk you agree to accept before the insurance company starts paying on a claim. The higher your deductible, the more money you can save on your rental home insurance premiums. You could save up to 25% on your premiums simply by doubling your deductible.
BUNDLE YOUR RENTAL HOME AND AUTO POLICIES
If you already have auto insurance, consider either purchasing your rental home insurance with the same provider or moving your auto insurance to your rental home insurance provider. More often than not, you can save a lot of money on your premiums by bundling the two with the same provider. In fact, bundling can save you anywhere from 5 to 15 percent on your monthly payment.
DETERMINE IF LOYALTY MATTERS
Insurance providers typically reward their loyal customers by offering policy discounts. Some insurers will reduce your premiums by 5 percent if you stay with them for three to five years and by 10 percent if you remain a policyholder for six years or more.
However, while loyalty has its benefits, some providers offer cheaper discounts to new clients who switch over to their agency. Make sure you do not ignore such opportunities by occasionally checking your price with other policies that could potentially be cheaper from the beginning
DON’T BUY WHAT YOU DON’T NEED
This might sound obvious, but don’t have insurance for things you don’t need to cover. For example, if your rental home isn’t in a flood zone, flood insurance may not be the best option for you. So unless you have a good reason for having a type of insurance, you probably shouldn’t have it. With that being said, it would also be a good idea to reevaluate your coverage each year to make sure your policies are relevant to your current lifestyle. Having one that is unneeded will only make you spend unnecessary money that could be used elsewhere.
SHOP AROUND FOR RENTAL HOME INSURANCE
Odds are that you aren’t going to pick the cheapest insurance provider with your first choice. In order to make sure you don’t pay more than necessary, shop around either before purchasing rental home insurance or before renewing your current policy. Ask your friends who own rental homes who they are covered through and check consumer guides to be sure you get the lowest rates that fit your current situation.
To be sure you get the lowest premiums on your homeowners’ insurance, contact Ownby Insurance agency today. We’ll do the shopping for you to get you the best coverage at the best price, whether it’s your first time or you need a readjustment upon renewal time.