How to Reduce Your Property Insurance Premium
In today’s episode, we are diving into a topic that could save you hundreds, maybe even thousands, each year: how to reduce your property insurance premium.
With return guest Jason Jones, we’ll explore practical strategies to cut down your premium without sacrificing the coverage you need. Remember, even small steps can lead to significant savings over time. Let’s get started!
What Influences Insurance Premiums?
You have a few things that are significant in establishing what the premiums are. First, the property value. That’s where the more expensive the property, say your California or Florida properties, the more costly it is to rebuild and repair.
Location can also impact premiums. Location is important because some areas are more prone to natural disasters or certain elements, like theft and vandalism.
Additionally, insurers look at claims history. If you have a lot of past claims that signals a red flag to the insurer. In order to be comfortable, they’re going to want to collect enough premium to offset what they feel the risks are. That doesn’t mean that if you have a claim, you’re going to get penalized for it. But it’s definitely important, if you do have claims, that you attempt to mitigate the risk sooner than later.
Why Do Insurance Premiums Vary by Provider?
Providers have different appetites for the types of risks that they insure. That could factor in experience or the amount of capacity they were given in a certain area. Every provider has a different portfolio of properties they insure, and they try to spread that risk. Overall, they’re assessing the risk they’re willing to take on and every provider is different in what they’re willing to risk.
Five Key Strategies to Reduce Insurance Premiums
First up, how can raising your deductible help lower your premium?
Well, increasing your deductible means ultimately, you’re self-insuring more, which lowers the risk for the insurance company. And that output is a lower premium for you.
Reducing Insurance Costs by Making Your Property More Resistant to Loss
Property management helps you avoid preventable losses and demonstrates to your insurer that you’re serious about risk management. This means you’re clearing gutters, limbs, sidewalks, driveways, fireplaces, etc. to make sure that there aren’t any obvious risks or things that could pose challenges to guests or tenants.
Benefits of Combining Properties onto One Policy
Combining your properties onto one insurer is really a good tool for the investor. And the reason I say that is because you’re better able to understand how all of the properties will be managed. You don’t have a deviation from one carrier to the next.
The Importance of Requiring Tenants to Carry Renters Insurance
Having a renters policy in force means the insurance company representing the negligent party pays for a tenant-caused loss, which assists in stabilizing your property rates long term. If the negligent tenant doesn’t have renters insurance, the next person to pay for the claim is the owner.
Shopping Around and Using an Independent Agent
Independent agents are contracted with several carriers and programs. It’s important to find one who understands your unique needs as an investor and is willing to take the time to understand your goals. Different carriers will often provide different options and approaches to the risk (your property) in question.
Areas Not to Cut Corners
Liability insurance is one of those areas that’s a relatively small cost for what it’s protecting you for.
The Importance of Understanding Insurance Costs
When considering insurance policies, it’s crucial to not only focus on the actual loss amount but also take into account defense costs. These costs can include expenses for investigators, arbitrators, mediators, and more, which can add up to a significant amount. Cutting corners in this area is not recommended. It is generally advised to have a minimum coverage of $1,000,000 per occurrence and $2,000,000 aggregate.
Another area where cutting corners is ill-advised is coinsurance. Insuring your property to a lower value to save on insurance costs can have a detrimental impact on your claim payout if you are underinsured. Understanding the rebuild value of your home and insuring it appropriately is essential to ensure adequate coverage.
Game Segment: How much could you save?
For our game today, we are going to present a potential money-saving strategy with options on how much it could save. And you’re going to let us know which option you believe is correct.
Question 1: Insurance companies consider homes with smoke alarms a lower risk because they provide early warning of a fire, which can prevent a small fire from becoming a large one. How much do you think you can save by having properly installed smoke alarms? (A) Up to 5%, (B) Up to 10%, (C) Up to 20%.
As someone who has worked as an adjuster, I have witnessed firsthand the potential savings that can result from having functional smoke alarms. Therefore, I would choose option C, up to 20%.
Question 2: Increasing your property deductible from $1,000 to $5,000 could save you as much as ___. (A) 15%, (B) 25%, (C) 35%.
Considering my experience, I would go with option B, 25% for this question.
Question 3: Upgrading your roof to impact-resistant materials makes it less likely for damage to occur during a storm and can potentially save you between ___. (A) 5 to 10%, (B) 10 to 20%, (C) 15 to 25%.
Based on my knowledge, I would choose option B, 10 to 20% for this question.
Watch the full interview here!
The Importance of Regular Exercise
Exercise is an essential component of a healthy lifestyle. It not only helps you maintain a healthy weight but also has numerous other benefits for your physical and mental well-being. Regular exercise can improve your cardiovascular health, strengthen your muscles and bones, boost your mood, and even help you sleep better. In this article, we will explore the importance of regular exercise and why you should make it a priority in your daily routine.
Physical Benefits of Exercise
One of the most significant benefits of regular exercise is its impact on your physical health. When you engage in physical activity, you are strengthening your heart and lungs, which can help reduce your risk of developing cardiovascular diseases such as heart disease and stroke. Exercise also helps to improve your circulation, which can lower your blood pressure and reduce your risk of developing high cholesterol.
In addition to improving your cardiovascular health, regular exercise can also help you maintain a healthy weight. When you engage in physical activity, you are burning calories, which can help you lose weight or prevent weight gain. Exercise also helps to build muscle mass, which can increase your metabolism and help you burn calories more efficiently.
Another physical benefit of exercise is its impact on your muscles and bones. When you engage in weight-bearing exercises such as running, walking, or weightlifting, you are strengthening your muscles and bones, which can help prevent osteoporosis and improve your overall strength and balance.
Mental Benefits of Exercise
In addition to the physical benefits of exercise, regular physical activity can also have a positive impact on your mental well-being. When you exercise, your body releases endorphins, which are hormones that can help reduce feelings of stress and anxiety and improve your mood. Exercise can also help improve your cognitive function, memory, and focus.
Regular exercise has also been shown to improve sleep quality. When you engage in physical activity, your body temperature rises, and then falls again after you finish exercising. This drop in body temperature can help signal to your body that it’s time to sleep, making it easier for you to fall asleep and stay asleep throughout the night.
Making Exercise a Priority
With all of the benefits that regular exercise can provide, it’s essential to make it a priority in your daily routine. To incorporate exercise into your daily life, try to find activities that you enjoy and that fit into your schedule. Whether it’s going for a walk, taking a yoga class, or going for a run, finding activities that you enjoy can help make exercise feel less like a chore and more like a fun and rewarding experience.
In conclusion, regular exercise is essential for maintaining a healthy lifestyle. It can improve your physical health, mental well-being, and overall quality of life. By making exercise a priority in your daily routine, you can reap the numerous benefits that physical activity has to offer. So lace up your sneakers, grab your workout gear, and get moving!