What Can Affect the Cost of Your Rental Property Insurance?

Discover 8 Factors that Influence Rental Property Insurances. You Will Not Believe in Factor Number 7

Unfortunately, as sad as it is, while we can ask our friends for referrals to real estate insurance companies, we cannot base our prices on what they pay for their insurances. That is, unless you are neighbours and live in equal properties, under equal conditions.

However, this does not preclude you from obtaining a reliable estimate of the cost of home insurance for your rental property. This is because most insurance companies base their policies on the same factors.
So, to provide you with more information and help you make the best decision for your current or future home, our team has compiled a list of eight factors that will be considered when you sign your rental property insurance policy.

1. Location

The region you live in directly affects the value of your insurance. Whether by state legislation, the local climate, or even the safety of the chosen neighbourhood. Homes located in areas that have been hit by environmental disasters often require specific coverage, such as flood insurance. The neighbourhood you live in, and its history of robberies and thefts can also increase the price of your insurance.

2. Credit history

In some states, insurers can use your credit history when creating home insurance rates. Each insurer has its own credit formula, which is different from a credit score. Someone with poor credit may pay more for coverage than someone with excellent credit.

3. Age and condition of the property

The age of the property and how it was built are crucial factors in your rental property insurance rates, in addition of course, to any previous claims history. When establishing the actual cost of having insurance, you need to be able to answer the following question: would the property be difficult to repair?

Older properties generally cost more, especially if they are damaged. Not to mention that old materials and structures can be more expensive to replace. Therefore, they face higher insurance rates.

4. Home renovations

Any home renovation is likely to increase the value of the property. This new value will inevitably be reflected in your insurance policy. Ensure to always inform your insurance agency as your policy will need to be updated. Although it will affect the numbers on your instalments, you need the entire property to be insured, especially the remodelled space.

5. Marital status

Insurance companies have a history of benefiting those who fit conservative standards within society, such as being married. Just as young people suffer losses for being young, so do single people. Married homeowners historically file fewer claims than single ones and are seen as a lower risk for insurers.

6. Working remotely

In times of remote work, many workers are moving their offices permanently to their homes. Therefore, it is important that you think about protecting work equipment, supplies, and everything else that is related to your job. Consult your agency and see if they have special policies for that.

Do what is possible to keep your equipment insured and even get reimbursed if damage to the property forces you to suspend your home-based work. Without the endorsement or specific coverage, any damage to your work materials will not be covered under your home-based policy.

7. Pets

Dogs and cats are one of people’s greatest loves. But they can also impact the cost of your insurance. For example, the liability coverage on your policy can help you if you are sued by someone who has been bitten or attacked by your dog.

However, some insurance companies may deny insurance to those who own certain breeds, depending on whether they tend to behave dangerously. Other companies look on a case-by-case basis, taking into consideration the dog’s behavioural history.

To qualify for a policy, you may be required to sign disclaimers for pet behaviour liability. Other companies may provide coverage, but ask for proof of training or containment, such as the use of a muzzle and how the pet is kept inside the property.

8. Proximity to the fire department

If you are not bothered by sirens or other sounds that may come from a fire department, this is an excellent location for your home, financially speaking. Knowing the security you feel with fire fighters right around the corner, is what most insurance companies feel as well. They tend to offer discounts for properties near a fire station.

The factors that can play a role in the price you pay for your rental property insurance can be various and sometimes even a little strange. They can all have an impact, however small, on the rates that are assigned to the policy of your home insurance for rental properties. With this information in hand, you can now look for your ideal insurance policy with greater confidence.

Whether it is because you are moving or just because you have chosen to protect your home and your goods, you can rely on Steadfast Insurance to offer the best property insurance solutions for you.