How Much Is Rental Property Insurance?

If ever an important investment cost varied significantly, it’s usually rental property insurance. This figure typically fluctuates depending on several factors, including the property’s size and location. Most major insurance companies will offer this type of protection in order to shield your rental income. Regarding the cost, there are a few factors that can influence it. In order to get the most ideal price, working with a qualified insurance agency is your best bet. Here is a closer look at the average cost of rental property insurance.

What Is The Average Cost Of Rental Property Insurance?

According to Fit Small Business, a digital resource for small business owners, the average policy for a $200,000 rental property in the United States costs between $1,472 and $1,596 annually. A recent rate analysis by Insurance.com also revealed that the national average renters insurance cost for a policy with recommended coverage levels of $40,000 for personal property, a $1,000 deductible and $100,000 worth of liability protection is $326 a year ($27 per month). However, the cost of insurance you ultimately pay will likely vary based on certain factors.

Factors That Influence Insurance Rates

Once you own your first rental property, you will likely have many questions, including how much you can expect to pay in additional expenses (aside from monthly rent). There are several factors that impact insurance rates, although here we will focus on five factors.

Age & Condition Of The Property

The age and condition of a rental property are perhaps two of the first characteristics many people notice upon entering a property. If a property appears old and dilapidated on the inside (dusty surfaces, broken fixtures, etc.), the rate to insure it will likely be low. Therefore, it’s imperative to routinely clean and perform repairs all throughout your rental unit.

The Number Of Units

The insurance rate for a rental property also typically varies depending on its size – in other words, how many units or rooms it contains. A one-bedroom apartment and a two-bedroom property will generally carry different rent prices. The same rule applies to properties that include more features compared to others (e.g. larger kitchen with more appliances, such as a dishwasher).

The Location Of The Property

When discussing real estate matters, a property’s geographic location is always one of the top factors that determine its value. A safe neighborhood with low crime rates, good-quality schools, and convenient access to public transportation typically features high-priced homes and rental properties, and thus higher insurance rates. Contrarily, rental properties near highways, hospitals, fire stations, and other noisy or high-traffic areas are often relatively low-priced.

Total Replacement Cost Of The Property

A property’s replacement cost is the amount of money its owner must spend in order to replace it with one that carries an equal or higher value. This figure may often vary based on factors such as the property’s market value and the total sum of additional expenses involved. Be sure to factor in depreciation costs when determining the final cost to replace your property.

Security Features On The Property

If you install security features on your property, such as cameras and burglar alarms, this can help significantly lower your insurance payments. This is because the installation of these features can serve as proof to an insurance provider that you have taken the initiative to protect yourself in the event of an incident (e.g. theft or property damage) by taking a concrete step.

How To Reduce Rental Property Insurance Rates

One way renters frequently seek to lower their rental property insurance costs is by acquiring a multi-policy discount, which entails combining this type of insurance with other forms of protection, such as auto insurance. With this option, your coverage level can often remain the same. Be sure to explore as many options as you can and ask each insurance provider you speak with if they offer multi-policy discounts.

Speak To Experienced Personal Insurance Brokers

Reach out to the experienced personal insurance brokers at John M. Glover for more information on the cost of rental property insurance, which is often more expensive than homeowners’ insurance because insurance providers treat rental properties like businesses. We are headquartered in Norwalk, CT, and have been dedicated to serving the insurance needs of our clients in Connecticut, New York, New Jersey, Massachusetts and Hawaii since our founding in 1916.

At JMG Insurance Corp, we place a major emphasis on the importance of forming deep, long-lasting relationships. That is why we always strive to listen attentively to our clients’ unique needs and concerns, and we offer them solutions based on this information. A rental property insurance policy can cover many different areas, including dwelling coverage, liability coverage, and loss of rent coverage. Call John M. Glover today at 1-844-304-7332 or contact us online for a free quote or to learn more about our insurance products.