Due to the increased risks of being a landlord vs. a traditional homeowner, it costs 25% more on average to insure a rental property than a home. Luckily, landlord insurance discounts are available from many different insurance companies to help you reduce your premium rates. You might be eligible to receive a discount for bundling your policies, belonging to a certain organization, or installing security features at your rental properties.
Fortunately, a local independent insurance agent can help you find any landlord insurance discounts you qualify for. They'll help you get the most affordable coverage possible. But first, here's a guide to some of the most common landlord insurance discounts you can apply to your policy.
Why Is Landlord Insurance More Expensive Than Homeowners Insurance?
Landlord insurance, also sometimes called rental property insurance or buy-to-let insurance, often costs as much as a quarter more than a standard homeowners insurance policy. Landlord policies must cost more than home policies to account for additional expenses and risks that come along with renting property to others.
These risks can include tenant property damage and liability issues that can arise. Similar to home insurance, landlord insurance can help pay to repair a landlord's property after incidents of vandalism and more.
Even if a landlord requires their tenants to have renters insurance, as the property owner, they still have a higher liability risk than a traditional homeowner. If, for example, a renter's dog attacks someone at the rental property and a third party gets injured, the landlord could be held liable for the incident in some cases.
Further, landlord insurance can sometimes help replace lost rental income for landlords. Since typical homeowners don't have to protect the risk of lost rental income, they don't need this special kind of insurance protection. As such, home insurance can be much less expensive than landlord insurance.
Common Landlord Insurance Discounts
Landlord insurance discounts can vary by insurance company, but there are many common savings options offered by most carriers. Here are some of the most common landlord insurance discounts that can help you save money on your premiums.
Safety discounts
Safety discounts can be awarded if the insurance company sees proof that you take good care of your property or that your property has special features that make it safer than average. This includes installing burglar alarms, sprinklers, or a high-quality roof. The more steps you take to increase your rental property's safety and security, the more likely you are to score a safety discount on your landlord insurance.
Bundling discounts
Also called multi-policy discounts, these are discounts you can get if you buy multiple types of insurance with one company. Say you need to insure your home, your car, and your rental property. If you purchase your home insurance or auto insurance from the same carrier as your landlord insurance, the insurer is likely to reward you with a discount on each policy. You can also typically bundle your business insurance, including liability or property coverage for your leasing office or maintenance vehicles, with insurance for your rental properties.
Group discounts
Group discounts are often offered if you belong to a certain association or profession, such as a teachers association or AARP. Common group discounts include military discounts, teacher discounts, and government employee discounts.
Loyalty discounts
Loyalty discounts reward customers who stay with the same insurance company for a certain period of time, such as a few years. You might also get discounts for referring friends and family to your insurance company.
How to Get Landlord Insurance Discounts
In many cases, your insurance company will automatically apply certain landlord insurance discounts you qualify for, even if you don't directly ask about them. These discounts may not be explicitly spelled out in your policy and can be based on things you can’t always control, like your location.
Here are some tips for getting all the landlord insurance discounts you're eligible for:
- Gather important information: Write down all the important details the insurance company may need, including your property's age, size, condition, etc. If being a landlord is your side hustle business, note your full-time occupation and whether you’re a veteran or service member, too, since you may qualify for more discounts.
- Contact an independent insurance agent: Contact an independent insurance agent in your town. They'll use all the important information you gathered to determine your eligibility for any available discounts. They can also shop and compare policies from multiple insurance carriers for you to see which one has the best rates and discount options.
- Compare policies: Your independent insurance agent can help you review your coverage options to see which offers the best blend of coverage and cost. They will encourage you to choose a policy from a carrier with a good reputation and quality coverage, not just the one that offers the best discounts or lowest rates.
- Keep your agent updated: If you've expanded your landlord business or upgraded any of your properties, it's important to keep your carrier or your agent updated. You may need to update your coverage or you may now be able to receive certain discounts you couldn't before.
- Consider renovations: Making certain renovations to your rental properties, especially those that reduce the risk of fire, could qualify you for big savings. Report any renovations to your rental properties to your agent or insurance carrier to find out if you might be able to receive a new discount.
An independent insurance agent will automatically determine which discounts you may qualify for on landlord insurance when helping you choose the right policy.
How Much Does Landlord Insurance Cost?
The cost of landlord insurance can depend on many different factors. If you own an older property, especially one in a hurricane zone or a rural area with no fire department, you likely won’t get as many discounts as you would with a newer building in a safe area. If you’re thinking of investing in a fixer-upper property, bundling and loyalty discounts would likely be the easiest to obtain.
Here are some factors that can influence landlord insurance premium rates:
- Age and condition of the rental property
- Location
- Value of each rental property
- Amount of coverage needed
- Deductibles and additional coverage options chosen
If you select a higher deductible amount, you'll likely get lower premiums on your policy. However, keep in mind that if you choose a high deductible, you'll have to pay that amount out-of-pocket each time you file a claim before receiving any reimbursement.
Determine your budget to decide if a higher deductible is worth the possibility of having to pay more per claim. A commonly recommended deductible for landlord insurance is $1,000 for any buildings.
An Independent Insurance Agent Can Help You Find Landlord Insurance Discounts
When it comes to finding the best landlord insurance discounts available, no one's better equipped to help than independent insurance agents. These agents have access to multiple insurance companies, so they know which ones offer the best coverage at the best possible price. And down the road, your agent will still be there to help file landlord insurance claims for you or update your coverage as your business evolves.
