Landlords are increasingly anxious about the rising cost of home insurance premiums.
A recent survey found that 80% of landlords are worried about "future home insurance premium hikes." Among them, 37% are "very concerned" and 43% are "somewhat concerned."
After years of significant losses for the insurance industry due to natural disasters, property insurers are capping policies, tightening underwriting, refusing new policies, exiting states, and raising rates.
According to a report from Insurify, homeowners can expect a 6% increase in average premiums by the end of the year, on top of the 20% rise that has already taken place over the past two years. A potentially severe hurricane season could drive rates even higher in 2025.
As a result, many landlords are feeling the financial squeeze as their rental income struggles to cover mortgages and other outgoings, leading some to take on higher deductibles or drop insurance altogether.
One small landlord in Fort Lauderdale saw his monthly insurance and property tax payments spike between $600 and $700 after a property insurer reassessed his home.
To manage rising costs, Insurify suggests that landlords:
- Consider raising rents to cover expenses
- Shop around for competitive rates
- Invest in home protections like impact windows in hurricane-prone areas (some insurers offer discounts for such upgrades)
- Ensure adequate coverage (since standard policies don't cover flood damage, consider a separate flood policy)
By taking proactive measures, landlords can mitigate some of the financial strain caused by rising insurance premiums and better protect their investments.
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