Landlord Insurance

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Indiana Landlord Insurance

Indiana landlord insurance is a necessity when you rent your home to others for income. The distinct climate of Indiana offers potential disasters that other states just don't see. When determining the proper policy coverage you must determine where you stand to lose the most money in the event of a loss. Residents of Indiana know that frozen water pipes, ice dams and snow cause a tremendous amount of damage.

No matter if you rent a home in Evansville, Indianapolis, or South Bend there will always be an insurance company looking to provide the lowest cost policy with the best coverage. Each year insurance carriers go through good and bad claims that determine what they will charge in the coming years. As a company gets hit hard with wind or water claims they will likely look to increase rates in the next few years to cover the losses.

It is is wise to compare landlord insurance rates from the most trusted companies each year so you know how much money you should be spending on your policy. Most landlords will not switch carriers every year because they either like the agent or have had a good experience with that company. Being a landlord takes time and money so a lot of times you may not switch because you don't have the time to make that decision. The fact is you can't afford not to make the change if you will save hundreds of dollars.

Landlord Insurance Deductible

Most landlords ask if they should increase their deductible on the rental property insurance policy. The average policy will have a $1000 deductible for all perils but many agents and companies will change that deductible for various reasons. Some companies will not offer a lower deductible than $1000 or they may only offer percentage deductibles. The fact is the higher the deductible you have the lower the premium will be but you need to consider how much you can afford if a claim does happen.

Having a high deductible may be the right choice only if it lowers the annual premium enough to warrant such a high out of pocket cost. Be wary of having a 1% or 2% deductible since it is usually higher than most people can afford. The percentage is of the dwelling coverage which usually is $200,000 or $2000 deductible for a 1% policy.

Cost of Landlord Insurance in Indiana

The cost to insure your rental property in IN is dependent upon numerous rating factors that home insurance companies use to determine the proper premium. When you own a condo or townhouse the cost of landlord insurance is very minimal because usually you split that cost with the homeowners association which insurers the exterior of your unit. If you insure a single family home or rental complex then your insurance costs are going to be much higher due to the replacement cost of the building is solely your responsibility.

Here are a few of the most common rating factors that insurance companies use to determine your landlord insurance premium:

  • Credit rating - This is your personal credit rating which is similar to a FICO score but can be based on other specific criteria such as payment history and bankruptcy.
  • Location - The zip code or city that your rental unit is located in has a dramatic effect on your insurance premiums as companies who have big losses in those areas will increase rates to get profitable.
  • Building type - This can be numerous things including condo, single family, and townhouse including the materials used to construct the property.
  • Claim history - If you have one or more claims in the past 3 years as a homeowner most insurance companies will surcharge your premium. Some companies may not even accept your business if you have more than two.
  • Discounts - If you have more business with an insurance carrier they are more likely to offer discounts to keep all of your business with them.

How to Find The Cheapest Landlord Insurance in IN

Each insurance company is different in the way they determine your rate and how much the average policy will cost but here are ways to ensure the lowest cost premium based on the factors above.

  • Good Credit - The better your credit the lower the cost of your insurance. Many states are now allowing credit as a rating criteria so get used to it being used. Try to keep your past payment history spotless and a FICO score above 720 is considered excellent.
  • Improve the Location - There is not much you can do about the location once you have purchased the rental property but be sure to keep the home well-kept and surrounding trees cut back to minimize potential hazards. The better your property appears the lower the cost to insure it will be.
  • Building type - Condo and townhouse owners will likely have a home owners association which will cover the exterior of the home so you are only responsible for the interior. This can save you hundreds of dollars each year. If the unit includes custom building and expensive materials expect to pay more because the cost to replace those items is greater.
  • No Claim history - Try not to make a claim if it is a small value of $2000 or less. Most companies look at multiple claims as a sign that you are prone to making claims in the future. If you are deciding whether to make a claim or not contact your insurance agent and ask them personally. Don't call the claim department and ask them because they are likely to document the call and file it for future use.
  • More Discounts - Ask about multiple policy discounts and the combination of auto and home insurance. Sometimes combining your personal auto insurance with this policy can save you 20-30% off each policy.

Indiana's 5 largest cities by population

City
Population
Indianapolis 820,445
Fort Wayne 253,691
Evansville 117,429
South Bend 101,168
Hammond 80,830

*Data from 2010 Census Population by the Department of Economic and Community Development.

Common Landlord Insurance Claims in IN (Indiana)

Wind
(Most claims cost over $2,200 to repair wind damage)

Fire
(Most claims cost over $12,000 to repair damages from fire)

Water
(Most claims cost over $4,000 to repair damage from water)

Lightning
(Most claims cost over $1,300 to repair physical damages to property)

Loss of Rental Income
(Most claims cost over $2,000 to recoup lost rental income)

NOTICE: The amounts listed above are for illustrative purposes only and should not be used to decide what coverage limits you need for your landlord policy. Speak with your insurance agent to determine the proper coverage limits.

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