Making sure you get the right insurance coverage has traditionally required weeding through and evaluating quotes, and talking to various independent insurance agents, all of which are time-consuming.
What happens if you have multiple properties? Insuring all of them adds more to your plate—making the process even more tedious.
However, it doesn't have to be stressful to insure a portfolio of properties. Insurance companies like Obie have made the process easier for property owners and managers with multiple properties through a solution called a master insurance policy.
In this article, we'll explain what a master insurance policy is, how it works, and how it could benefit you.
What Is a Master Insurance Policy for Landlords?
A master insurance policy is insurance coverage that bundles multiple insurance policies into one. Master policies are quite common and apply to different scenarios.
Often, businesses and individuals require several insurance policies for a particular coverage type. For example, an employer might require health or life insurance coverage for several employees. A company with multiple subsidiaries across the country may need business insurance for each location.
These scenarios lead employers and businesses to combine their insurance into a master policy instead of buying individual coverage.
In the same manner, a master insurance policy for real estate investors consolidates landlord insurance policies for multiple properties and presents it under one insurance policy. This coverage option helps owners and property managers with a portfolio of properties manage their insurance more easily.
How a Rental Property Master Insurance Policy Works
Several factors are at play when considering this insurance option, such as what the policy covers and which properties are eligible for protection. Understanding how master insurance policies work is crucial to helping you make informed decisions about safeguarding your rental property.
A master insurance policy combines several policies, so a rental property owner or property manager with multiple homes or buildings can bundle coverage for each property under this one policy. Simply put, it will cover all your rental properties, regardless of whether they are based in the same location or are different types of rental buildings.
In addition to covering properties in various zip codes, a master insurance policy for landlords also has the following features:
It covers properties from multiple owners as long as they are under a particular real estate company or property manager.
It has one renewal date.
It has varying deductibles and coverage levels to match each property.
It has a higher total insured sum.
Most master insurance policies cover the basic perils, including smoke, fire, lightning, theft, vandalism, malicious damage, hail, and general liability coverage. However, insurance policies are never a one-size-fits-all solution—even master policies. You’ll still need to to customize the level of coverage you need for each individual property, depending on your specific needs and circumstances.
Benefits of Having a Master Insurance Policy
Ease of Administrative Tasks
If you already have several properties under your management, you have firsthand experience with how hectic it can be to manage all the administrative tasks. In addition to the paperwork, you also need to handle tenants, finances, and taxes.
Given that every property will require insurance coverage with its own insurance management and paperwork, a master insurance policy can come in handy. It can help streamline some administrative tasks that come with owning multiple rental properties, thus freeing up your time for other necessary tasks.
One Insurance Renewal Date
Imagine the ease of having only one insurance renewal date for all your properties. You won’t need to set numerous reminders for renewals or worry about whether you renewed a policy for one of your properties.
A master insurance policy covers all your properties under one umbrella. That means having a single renewal date for your entire property portfolio. You get peace of mind knowing your renewal due date won’t be forgotten, plus you can plan cash flows better around a single date instead of several renewal dates throughout the year.
Ease of Shopping for a Policy
Finding the right insurance policy for a single property can be challenging enough when having to compare several quotes from different brokers and insurers. The process becomes even more tedious when dealing with a portfolio of properties.
A master insurance policy can simplify all of this for you. You receive a single quote that covers all of your properties rather than getting multiple quotes for each one.
Economies of Scale
Economies of scale refers to the ability to save money from buying items in bulk, such as cleaning supplies and light bulbs. As a property owner or manager, you can bundle several insurance coverages under one policy instead of purchasing individual policies, which allows you to bargain for a better deal.
Master Insurance vs. Individual Policies
The main difference between a master insurance policy and an individual policy is the number of properties covered.
A master policy will bundle policies for several properties. As a rule of thumb, you start to see savings on a master insurance policy when you bundle the insurance policies for more than 10 units.
An individual landlord policy only covers a single rental property, such as a single-family home or triplex residence. If you own and rent out several properties and want to keep the insurance policies separate, you'd get individual insurance policies for each one.
The main drawback to having individual insurance policies for each rental property is the increased time and expense associated with managing them and the risk of inconsistencies or gaps in coverage.
Additionally, the total coverage amount will vary. A master insurance policy will have a higher total since it covers more properties. And while premiums will vary from carrier to carrier, you are likely to pay more with individual policies than when you bundle your landlord policies and get a master policy.
Get the Right Insurance Coverage for Your Properties
If you're a landlord or property manager with multiple properties, master insurance coverage can help simplify your workload.
By consolidating your landlord insurance for a portfolio of properties under one insurance policy, you'll only have one insurance renewal date and less paperwork. Plus, you could receive more comprehensive coverage and better value for your money.
For a hassle-free experience obtaining the right insurance coverage at competitive rates, contact an insurance specialist Obie today via email.