Finding Better Insurance PlansFinding Better Insurance Plans


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Finding Better Insurance Plans

After I switched jobs, I knew I would probably be faced with choosing a new insurance policy. I was nervous about the transition, but I knew it had to be better than the plan I had been using at my old job. I started going through the options with the human resources person, and it took me a long time to understand the different options. After a thorough evaluation, I opted for a health savings account, which let me keep a large percentage of what I would normally be paying in premiums every single month. Check out this blog for more information about health insurance plans.

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Considering Entering The Florida Rental Real Estate Market? What You Should Know About Insurance

Whether you're placing your existing home or condominium into rental service or are finally taking the plunge into investment real estate by purchasing a home you plan to renovate and rent out, you may be excited at the prospect of becoming a landlord and developing an alternative stream of income. While a rental real estate investment can often pay dividends for decades into the future, there are some special considerations you'll want to take into account when purchasing rental property in Florida -- particularly when it comes to homeowner's insurance. Read on to learn more about insuring your rental property while keeping costs as low as possible.

Why is Florida unique when it comes to homeowner's insurance? 

Florida holds the distinction of having the highest homeowner's insurance rates in the United States, with the average homeowner paying a little more than $2,100 to insure his or her home. These high rates are believed to be a "perfect storm" of factors, including the state's proximity to the Atlantic Ocean and Gulf of Mexico, penchant for large, damaging hurricanes and tropical storms, and alleged abuse and fraud by attorneys and contractors.

While homeowners can help manage the cost of insuring their primary homes by choosing higher deductibles or bundling home and auto policies and taking advantage of other promotional discounts, those who are selecting insurance for a non-owner-occupied property may have a more difficult time. Very few homeowner's insurance policies offer continued coverage for homes that have been placed into rental service and are no longer occupied by the named insured. As a result, if you simply move out of your current home and begin renting it out to tenants without notifying your homeowner's insurance company of this change, you may find that you no longer have coverage for any claims that may be levied against you (like if your tenant's guest slips and falls on the porch) or damage to your home itself.

You'll instead need to purchase a separate non-owner-occupied insurance policy to cover any damage to (or on) your rental property. While you'll often be able to bundle this non-owner-occupied policy with your original home and auto insurance policies, this will be a standalone contract that will pay to repair wind, hail, or other storm damage to your home as well as provide liability protection if anyone is injured on your property. (This policy won't cover any damage to your tenants' belongings stored within the rental property, so it's important to write language into your lease ensuring that your tenant is made aware he or she will need to purchase renter's insurance for this coverage.)

What can you do to lower your insurance costs? 

While the cost of homeowner's insurance can be passed on to the renter in the form of higher rates, you don't want to be forced to raise your rents to a level that pushes your property out of market range. Because you'll often be competing with landlords who own their rental properties outright (or owe much less on their mortgages), you may find yourself at a disadvantage if paying "list price" for non-owner-occupied insurance while also carrying a mortgage on the rental property.

One way to lower your insurance costs significantly is to invest in disaster-proofing home improvement like storm shutters, integrated generators, and reinforced roofs. These can be installed while completing renovations on a rental property you've recently purchased or, in many cases, retrofitted to work with your current home's design. Not only will these improvements help reduce the risk of your home being damaged during a tropical storm (and therefore reduce your insurance costs), the cost of making these repairs can often be directly deducted or used to offset any rental profit on your income tax return. For more information about insurance and home insurance quotes, contact a local company.