Hey there, so let’s talk property insurance. It’s been climbing faster than rents, and that’s not sitting well with me. But I’ve found a couple of nifty tricks to cut down on those pesky premiums while still playing it safe.
First up, I’ve learned that I can insure my properties at 80% of their replacement value and still be in the clear. This move alone can slash about 20% off my annual insurance rates – not too shabby, right? So, for instance, if I’ve got a property valued at $400,000, I can insure it for $320,000 and still be good to go.
But wait, there’s more! I’ve also discovered that bumping up my deductible can lead to some serious savings. By raising it from the usual 1% of the replacement value to 5%, I can enjoy another sweet 30% off my insurance bill. There’s also an option to go with a 3% deductible if 5% feels a bit too steep. So, if we do the math on that $400,000 property with a 5% deductible, that’s a deductible of $20,000 – a bit of a hit upfront, but the long-term savings make it worth it.
Altogether, these changes could potentially cut my annual insurance costs by a whopping 50%. And hey, that’s nothing to sneeze at!
Now, let’s talk about my property portfolio. I’ve got 19 residential homes spread out over a roughly two-mile area, ranging in value from $175,000 to $400,000. The cool thing is, none of these homes are connected to each other, so if something goes south, at least it won’t take down my whole income stream in one fell swoop.
Oh, and here’s a fun fact – about 25% of the total portfolio value is tied up in loans, but half of the properties are completely loan-free. Not sure if that’s a big deal, but hey, it’s good to know, right?
One last thing I’ve heard through the grapevine – apparently, in our medium-sized city, you can’t just take the insurance money and run. If you make a claim and get paid out, you’re expected to rebuild. So, better keep that in mind when making any insurance moves.
So there you have it, folks – a little insight into my world of property insurance and