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Why Your Rental Property Insurance Costs More Than Homeowners Insurance

For your first home, you bought a two-family, which was a fantastic decision.  You’ve lived there for a few years, saved up some money and now want to take your family to a single family home in the suburbs. When you switch your insurance from the owner occupied homeowner insurance to the non-owner occupied rental property insurance, you’re shocked to find out that it costs more.

Why does rental property insurance cost more than homeowners insurance?

There is a fundamental reason of why a rental property costs more to insure than your home. YOU DON’T LIVE THERE! You don’t live there anymore, which means that you have little to no control over what happens in the home. A renter is only invested in his apartment as much as it’s where he lives.

Maybe you were expecting a technical answer to the question. The technical answer is rental properties have more losses than homeowners insurance policies so insurance carriers have to charge more. The unscientific reason is that you’re not there to make sure that everything is going smoothly.

The Rental Property Cost Solution

rental propertyNow you understand that you might have to pay a little more for rental property insurance versus when you insured the property with a homeowners insurance policy, but there has to be a way to keep premiums low.

Thankfully, there is!

If you have a portfolio of rental properties that are 4 units or less, you can package all these policies together with your homeowners and auto insurance and save money with package discounts.

Having your rental property insurance with different carriers can work, but often there are better solutions.

This is where having an a good insurance agent comes in.  Your insurance agent should be able to shop your insurance through every available insurance carrier in your market to find out who has the most competitive rates for the coverage you need. We’d love to work with you but you don’t have to.  Armed with this knowledge, you should be able to find an insurance agent that can help.

If you have a question about coverage, you can email us or write to us in the Comments box below.

Thank you and Good luck.

If you’re looking for more information, check out our FAQ: 100 Insurance Questions Answered in 100 Days

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Disclaimer: This article is for informational purposely only. There is no legal advice being suggested or proffered and the author assumes no responsibility or liability for the actions taken or not taken by the readers based upon such information.

created by Ryan Hanley

Image: Julie A. Wenskoski /