Recently many investors have had their insurance policies cancelled and others have had their premiums increase up to 60%. Yes I said 60% !!! Can you survive if your premiums unexpectedly go up 60% ? According to most insurance companies insuring investment property, claim losses have exceeded premiums in many instances. Therefore premiums have substantially increased. How can we minimize claims. Should we simply not report losses? Should I increase my deductible to afford to remain insured? Most of us cannot afford to substantially raise our deductible and if we did we could we would soon experience great anxiety and fear or every strong wind or rainstorm. Let’s report all losses worthwhile. Let’s minimize our risk and divert it when we can.

How can we lower our premiums? Here are a couple of good ideas?

Require all Tenants to have Tenant Insurance
Require your tenants to show proof of tenant insurance. Apartment tenants can acquire $30,000 of protection against fire, theft, liability and other losses for $150 per year. The common apartment claims caused by resident negligence can be diverted to their insurance companies so your company does not have to claim the losses. This will minimize your claims and thus minimize or stabilize your premiums. To implement this money saving idea, incorporate the tenant requirement in your leases and require they show proof of insurance at the rental application or renewal stage.. Arrange for your tenants to call a AAA rated company’s agent. Sometimes the tenant insurance agent will pay your leasing agents a bonus if many tenants sign up. This will substantially save you premium dollars. Remember to make sure you remain competitive so as not to lose good tenant prospects.

An ounce of prevention is worth a pound of cure
Society today is high on litigation. People are filing suits to for a livelihood. Make sure you have fire alarms, fire extinguishers, proper lighting, proper emergency ingress and egress, safe HVAC systems, adequate security guards, easily recognized building addresses, prevent criminals from moving into your buildings, a crime and fire prevention program involving special equipment, residents and local public fire can police departments to name a few good measures.

Divide and Conquer
If you have large property, it may be sensible to divide it up to minimize your insurance cost. Claim history may indicate certain phases are experiencing the majority of the claims while other phases have fewer or no claims. Dividing the insurance coverage into high incident and low incident phases may result in an overall lower premium costs.

Get a couple of competitors to bid
Have your annual insurance reviewed and obtain quotes from a couple of reputable insurance agencies. This is smart business although it takes time and is aggravating. Perhaps there are pools offered by your local apartment association to reduce your cost.
Basically, look into more than one source to ascertain you are paying a competitive price.