Obtaining property insurance can start to get tricky once you acquire multiple properties.
If you've only purchased one or two rental properties, the same agent who provides your personal homeowners or automobile policy will likely provide reasonably priced insurance for your investment properties.
But once you've purchased your fourth or fifth property, insurance companies start to see you as a risk, and even though you may have never filed a claim, your rates can start to increase and your insurance company might even drop you.
There’s no easy fix to keep your insurance costs down, but here are a few pointers that may help.
Never Make a Claim
Unless you've had a total loss or some kind of major catastrophe, it’s going to be much less expensive in the long run to pay out-of-pocket for minor repairs or damages than to file an insurance claim.
Every claim you make on any of your properties is a mark against you, and will cost you in the form of increased insurance rates or the cancellation of your policy.
Having homeowners insurance claims on your record is almost like having bad credit, because claims stay with you for years and negatively affect your ability to keep insurance rates low.
Find a Trustworthy Agent
Shopping around for an insurance agent can be a hassle, but it’s worth the investment of time and energy to find an agent who understands your business.
Start by checking with the National Association of Real Estate Investment Advisors to find a local advisor who can point you in the correct direction.
Other local landlords may have good recommendations for trustworthy insurance agents.
You can also try to find a broker who can shop different companies and find the best one for you.
Never Call Your Insurance Company
Even if you’re not filing a claim and are just calling to ask for information, companies keep track of all phone calls and may count them against you.
It’s always better to speak directly with your agent, who will probably be willing to discuss your issues or questions “off the record.”
Choose a High Deductible
The higher your deductible, the better your insurance rates are going to be.
Be sure to check with your lender to make sure that the company will allow a large deductible amount.
It is important to make sure that the larger deductible isn't completely out of reach, should disaster strike.
Keep Your Properties Well Maintained
Performing routine maintenance on your properties makes sound financial sense because it limits your risk of damage from things like faulty wiring, leaky pipes, and unwanted pests.
It’s also a good idea because insurance inspectors will be less likely to jack up your rates or try to cancel your policy if they find a well-maintained property on a visit.
Maintain a Relationship with Your Agent
Property insurance is something you need to keep an eye on.
Make sure you read and understand any notices you receive, and communicate with your agent frequently to make sure everything is in order.
Building a rapport with your agent will benefit you in the event that you need his/her help.
Bundle Your Insurance
Insurance companies usually offer rate discounts if you’re willing to bundle all of your policies with them.
Consider putting your personal home, car, and investment property coverage all in one place.
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