Real Estate Investors and Homeowners Can Save on Insurance Costs
Plenty of consumers regularly review their auto insurance policies and compare rates from company to company, sometimes spurred on by the endless round of advertising by insurance companies. The same process should be used annually by property owners to see if they can save money on their homeowners insurance.
An annual review is a wise idea even if you are not able to save money because homeowners should keep track of their coverage and evaluate whether they need to increase their insurance to cover home improvements, additions or new personal property such as artwork or jewelry.
C.L.U.E. Reports
Many property owners are unaware that a report is maintained in each property they own in a national database. Known as the C.L.U.E. (Comprehensive Loss Underwriting Exchange) Report, this document includes dates of all claims, insurance companies, location of a loss, amount paid and the cause of the loss. An insurance company or a property owner can request a copy of the C.L.U.E. report for a particular property.
Investors and buyers should consider requesting home sellers for a copy of the report since it can reveal information about prior losses on the home. If the home had water or mold damage, it could be expensive or difficult to obtain insurance on the property.
Homeowners Insurance Discount Tips
In addition to requesting a C.L.U.E. report for a prospective property purchase, investors and homeowners can use several techniques which may earn them discounts on their homeowners insurance.
- Compare prices with an independent agent or online with netquote.com or insweb.com.
- Bundle your insurance coverage with one company for your car and your home (or homes). Many companies offer discounts of up to 15% on every policy.
- If you are a real estate investor and own multiple properties, ask for a “group discount” for the policies on all the homes.
- Raise your deductible. Going from a $500 to a $1000 deductible can save you as much as 25%.
- Add an alarm system, sprinklers or a security system to earn up to 20% off your insurance premiums. If you live in a hurricane-prone area, you may be able to get a discount if you install shutters and shatterproof windows.
- Some discounts are available for graduates of universities on an approved company list.
- If you haven’t had a claim in 10 years, you could qualify for a “claims-free” homeowner discount.
- Some companies offer a discount for properties within a gated community.
- A discount may be available for a property with newer electrical wiring.
- Depending on the composition of the roof, a discount may be available for a “hail-proof” roof.
- Check your credit score. If you own property with someone else, put the name of the person with the best credit score on the top of your insurance policy and your rates may go down.
- This may seem contradictory, but check to see if you should stay with your current company or go somewhere new. Some companies give discounts for loyalty, while others are developing new rating models for new customers. See if you can apply with your current company for a new policy to get that better rate or if you can do better by moving on to a new one.
One way to consistently keep your homeowners insurance rates low is to avoid making too many claims. Insurance companies sometimes consider even phone calls to discuss a claim as an “incident” which will go into your report. Think carefully about the cost of any small damages to your home and decide whether it makes more sense to cover the cost out-of-pocket rather than making a claim.
For property investors, even a small savings (or increase) in homeowners insurance can make a big difference in the bottom line.
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