My landlord insurance premium kept escalating and escalating. Once the pain became too much, I finally did what I should have done all along – pushed back. Here’s a summary of the tactics that I’ve used and some of the best ideas I’ve found to reduce the cost of insurance for landlords:


1. Compare Policies and Shop Around – I made the poor assumption that if I kept all landlord, home, and car insurance policies with the same company, I would get the best rate. That turned out to be a costly mistake. After a lot of work, I transformed my complex from an illegal drug and prostitution haven to a nice place for honorable people. The transformation took time and a new insurance appraiser was able to see things in their current light. By shopping around, I was granted a preferred rate and saved 40 percent on my insurance (thank you Mercury Insurance).


2. Make Sure All Assumptions are Accurate – While pushing back on a 10% increase, I discovered my insurance carrier was basing my premium on an incorrect square footage estimate. I showed them a lower estimate in of my original property appraisal, and got the increase reduced. Make sure your insurance company accurately accounts for your building’s materials and fire protection features as well.


3. Get Credit for Professional Associations and Other Group Rates – I was pleasantly surprised to learn I was entitled to a discount because I’m a professional engineer. Make sure you brag to your agent about your improving professional status.


4. Make it a Non-Smoking Facility – Modifying your rental agreement to ban smoking inside your units might turn off some smokers, but doing so will definitely score you a discount.


5. Make it Safer and More Fire Resistant – Installing burglar alarms, dead bolts, controlled access, or even switching from a wood to tile roof can reduce your premiums. Some insurance carriers will give you a break for installing $60 StoveTop FireStop extinguishers.  It doesn’t hurt to call your insurance agent to request a lower rate after you’ve made a risk lowering improvement.


6. Revisit your Replacement Value – Currently property values are down and unemployment is up. The cost to rebuild isn’t as high as it used to be.


7. Increase Your Deductible – This is the most commonly used strategy. Your insurance company will reward you if you agree to raise your deductible and personally assume more risks.


That’s my round up. Please leave a comment and tell me what I’ve missed.  Do you have any other strategies to reduce the cost of insurance for landlords?