Insurance increases and what are you doing to cope?

Question

It’s 2024, and I received renewal notices on 2 SFH properties with a 33% and 28% increase respectively, without any claims over the life of the policy period.  This is after a double digit percentage increase last year.

The only 2 options, if I want to hang on to these properties, are:

1) increase deductible

2) change carriers, to a lesser reputable carrier (think rated B or lower on AM best)

Is there anything I am missing and how are you coping?

Alecia Loveless · Answer

@Sam Faas I am simply looking for other ways to decrease costs regarding my rentals. For instance this year I switched three properties from me paying for heat to the tenants paying for their heat. It will take 1.5-2 years to recover the actual cost but less once I consider tax deductions and that will be an ongoing process I believe as I think the physical mechanical heaters will be deducted over the course of some years while the labor will be deducted in 2023 & 2024.

I also have several tenants paying significantly less than market rent that I am no longer being lenient with regarding rent not being paid on time and some other issues and will likely be moving them along to other locations this year where I will be able to make necessary repairs and get rents to market rates and increase revenue by around $10,000.

Stuart Udis · Answer

The entire property insurance industry experienced re-pricing over the past few years. Construction costs are up significantly and as a result so are the replacement costs the underwriters rely upon in formulating your policy / premium. It can never hurt to seek additional insurance quotes. Some carriers tend to be more aggressive in certain markets. This is something your insurance broker should understand & be able to assist with.

Owen Rosen · Answer

What state are you in?

Insurance increases and what are you doing to cope?

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