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Fundamental Truths About Home Insurance

Let’s talk straight about homeowners’ insurance. Whether you are a homeowner, a landlord, or the owner of a vacant dwelling (Flip), I want to pull back the curtain on how this industry works and share how I handle insurance in my own life.

Why do rates always go up?

One of the most common misconceptions is that if you don’t file a claim, your rates should stay the same. Unfortunately, that is rarely the case. At a minimum, insurance rates generally keep pace with inflation. With the Federal Reserve’s target inflation rate at 2%, you should expect your premiums to increase by at least that much every year in perpetuity—even in a “perfect” world.

However, rates also depend on how accurately carriers predict the frequency and severity of claims. According to the Insurance Information Institute, about 5.53% of homeowners (1 in 18) filed a claim in 2023, with an average cost of nearly $17,000. The most common culprits are wind, hail, water damage (like a burst pipe), and fire.

If 94.5% of people don’t file a claim, why do everyone’s rates jump? It’s because of how risk is pooled. Carriers place you in a “box” with similar risks.

  • Box A: Homes built in 2015 with tile roofs, stucco exteriors, and owners with high credit scores.
  • Box B: 1950s block homes with shingle roofs and original galvanized pipes.

If those galvanized pipes start leaking across the country, the carrier pays out more than expected. To cover those losses, the rate goes up for everyone in that box, not just the individual who filed the claim. Sharing in losses is the fundamental tenet of insurance.

Why the sudden spike in recent years?

When inflation surged in 2022, it caught carriers off guard. The gap between what they expected to pay and what they actually paid was massive. Some companies were losing 20–25 cents on every dollar.

Arizona was hit particularly hard. Between 2021 and 2024, the typical Arizona homeowner saw their rates increase by more than $700. This was driven by a “perfect storm” of inflation, increased wildfire risk, and missed projections. The good news? As inflation levels off, carriers can predict costs more accurately, and we are finally seeing rates stabilize.

What is the average rate in Arizona?

The answer depends on which “box” you fit into. Factors like the age of the home, your claims history, and your credit score (which carriers use as a predictor for future claims) all play a role. Because of these variables, two neighbors can have wildly different premiums.

Current estimates for a $300k home in Arizona vary by source: Bankrate: $2,331, MoneyGeek: $2,602, and NerdWallet: $2,110

Generally, vacant homes cost the most to insure, primary residences the least, and landlord policies fall somewhere in the middle. In my experience, if you have good credit in Phoenix or Tucson, you’re likely looking at $1,500–$1,800.

What do I do as an insurance agent?

I’ll be open with you: I live in a rural part of Arizona (not a high wildfire zone) and pay $1,600 for a $350k home. Here is my personal strategy:

  1. I shop around every few years.
  2. I manage my deductible. I currently keep mine at $2,500 to lower the premium.
  3. I mitigate my own losses. When our water heater leaked recently, I didn’t file a claim. We cleaned it, dried it out, and hired a local contractor for the $5,000 repair.
  4. The $10k Rule: I generally will not file a claim for less than $10,000. I always get a repair estimate before calling the insurance company to ensure the damage significantly exceeds my deductible.

Is it time to shop?

If you haven’t compared rates in a couple of years, now is the time. Carriers are becoming “cautiously aggressive,” meaning they are offering competitive rates for the specific risks they want to bring onto their books.

Gila Insurance Group is a broker. We represent five of the top ten homeowners’ insurance companies, and we’re here to help you find the right “box” at the right price. To get a quote, visit www.GilaInsurance.com/azreia. We can help you with insurance for your auto, home, and investment properties.

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Gila Insurance Group: Protect. Save. Serve.

Gila Insurance Protecting Investors

Real estate investing in Arizona is a high-stakes game of strategy and grit. Our market is wild—at times soaring, and at others, faltering. AZREIA gives you the tools to understand the market and the strategy to pursue; Gila Insurance Group protects you as you navigate your investor journey. Whether you are scaling a portfolio of single-family rentals or navigating your first fix-and-flip, the quality of your team determines your success. At Gila Insurance Group, we don’t just provide policies; we are active investors who understand the “Investor Life.”

As a proud supporter of AZREIA, we have built our agency around three core pillars designed specifically for the Arizona investor: Protect, Save, and Serve.

Protect: Guarding Your Portfolio

In the world of real estate, you are a target for lawsuits and unforeseen disasters. Standard “one-size-fits-all” insurance often leaves gaps in liability and personal injury coverage that can sink a business. As an investor, you are a business owner, and you should think like one. How are you protecting your business? Too often, investors seek the cheapest rate possible only to be stuck with large, uncovered claims that derail business plans and profits.

Gila Insurance specializes in the niches that “big-box” carriers avoid or treat as secondary products: rental properties, short-term rentals (Airbnb/VRBO), manufactured homes, and vacant rehab projects. We have been attending AZREIA events since 2014; we have seen different investing strategies discussed, implemented, and succeed. Having protected all sorts of investment models, we are ready to help you on your journey.

Save: Maximizing Your Cash Flow

We know that every dollar spent on insurance is a dollar taken away from your ROI. As an independent broker, we don’t work for an insurance company—we work for you. We shop your coverage across different top-tier carriers to find the most competitive pricing in the market.

Our commitment to saving you money doesn’t end at the closing table. We utilize advanced technology to monitor your rates year-over-year. If your premium spikes at renewal, our system flags it, and our team will review to ensure that you have the best price available.

Serve: The Heart of an Educator

We believe the best risk management tool is education. Because we own rental properties ourselves, we’ve dealt with the “crazy tenants,” the evictions, and the repair headaches. Ask me about my fourplex in Tucson—it was a nightmare! But we have also had rental properties that worked out beautifully. We approach every AZREIA member with the heart of an educator, helping you understand exactly what you are buying so you can make informed decisions for your business. From our online quote tools to our local, responsive team in the Gila Valley, we prioritize your convenience and peace of mind.

Ready to see how much you can save? Visit GilaInsurance.com/AZREIA to start a quote or download our Rental Property Insurance Checklist to ensure your portfolio is truly protected.

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Loss of Rent Coverage – Your Financial Lifesaver in Stormy Times

Loss of Rent Coverage: Your Financial Lifesaver in Stormy Times

Attention real estate investors: imagine a peaceful morning interrupted by a call from your tenant. Instead of a simple question about mail or a running toilet, you learn that a burst pipe has transformed your rental into an unintentional indoor water park. Suddenly, you are wondering who to call, how to get it fixed, if your insurance is current, and who is going to cover the rent while the property is repaired.

That is where Loss of Rent Coverage steps in. It acts like a financial safety net, helping protect your rental income when your property becomes temporarily uninhabitable due to certain types of damage.

What Loss of Rent Coverage Really Is

Loss of Rent Coverage is designed to reimburse you for rental income you lose when a covered claim forces your tenants to move out during repairs. Think events such as:

  • Fire damage

  • Storm or wind damage

  • Burst pipes or other sudden water damage

While your property is being restored, your insurer can pay you the lost rent (up to your policy limits), so you can focus on repairs instead of worrying about cash flow.

What Loss of Rent Coverage Is Not

A common misconception is that Loss of Rent Coverage pays when a tenant simply stops paying rent or when you have a long vacancy. That is not what this coverage is for.

  • It does not cover non-paying tenants

  • It does not cover normal vacancy between renters

  • It only applies when there is a covered loss to the property that makes it unlivable

In most cases, the loss of rent is tied directly to a claim for physical damage: a tree through the roof, a fire, or a major water loss that requires your tenants to move out for repairs.

How It Works During a Claim

When a covered loss occurs and your property becomes uninhabitable:

  1. The tenants move out temporarily or the lease may need to be broken.

  2. Repairs begin, which can take weeks or even months.

  3. During that time, you are not receiving rent, even though your expenses continue.

Loss of Rent Coverage can replace that lost income (usually up to your documented rent amount), often requiring you to provide a copy of the lease. It will not pay more than what you were actually charging in rent, but it can keep your real estate business moving while your property is out of commission.

Why Not Just Use an Emergency Fund?

Emergency funds are important, but Loss of Rent Coverage is designed to prevent a temporary setback from becoming a serious financial hit. Instead of draining your savings to cover mortgage payments, taxes, and repairs while also losing income, this coverage helps stabilize your cash flow.

Insurance exists to protect you from catastrophic financial losses. Loss of Rent Coverage supports that goal by helping ensure your rental income continues, even when life throws you an unwelcome surprise.

How Much Coverage Should You Have?

When reviewing your policy, make sure Loss of Rent Coverage is included and that the limit is realistic. A good rule of thumb is to have at least enough coverage to match one year of rental income, since repairs can take longer than expected.

Loss of Rent Coverage is one of the unsung heroes of real estate investing. It helps keep your finances afloat when your property cannot. Life happens—pipes burst, storms hit, and accidents occur—but with the right coverage, your rental income does not have to sink with it.

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4 Things You Should Know About Landlord’s Insurance

Make Sure You Are Covered

As a landlord, it’s important that you hold a solid insurance policy for your property or properties. Since your property’s safety and repair relies on you rather than your tenants, it’s important to have plenty of information and a high-quality policy to ensure you are always covered in any situation. Learn about four key factors for landlord insurance today from the team at Gila Insurance Group LLC. Contact us to discover how we can help with all of your insurance needs!

Two young women moving into rental property

The four main factors of landlord insurance you should know include:

  • General liability insurance
  • Aspects that impact your policy
  • Extra coverages
  • What is not covered

General Liability

The first thing that is absolutely necessary as a landlord is general liability coverage. This type of insurance policy will protect you if a tenant or guest injures themselves on your property. Without it, you could be held responsible and could face costly legal battles and fees.

Aspects That Impact Your Policy

In an insurance policy, almost everything about your property will have an impact. However, some of the main factors that may affect the price of your policy will include:

  • Your property’s location
  • The size of the property
  • Pool
  • Wood fireplace
  • Proximity to a fire hydrant
  • And much more

To learn more about the factors that go into considering a policy, you can reach out to our team today.

Renter's keychain with house icon inserted into house lock

Extra Coverages To Consider

Each property will have a unique set of needs, which can be reflected in your landlord’s insurance policy. If you live in a high risk flood area, you may be required to have flood insurance. You also might want to have vandalism or burglary insurance options. And in some cases, building codes require certain types of permits or insurance.

What Isn’t Covered?

While many aspects of your property are covered in a landlord’s insurance policy, not everything is covered. Some of the things that are not covered include:

  • Tenants’ belongings (they should have renter’s insurance to cover this)
  • Maintenance
  • Equipment breakdowns (water heater, refrigerator, etc)

Renters agreement with house keys and pen

Get The Coverage You Need

Make sure you and your property are always fully covered with the help of landlord’s insurance from Gila Insurance Group LLC. Contact our team today to learn more about landlord’s insurance and to get started with your policy.

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Six Things to Check On Your Rental Property Insurance Declarations Page

Insurance at a glance, does it exist? Yes it does it’s called the declarations page. What is most important about the declarations page? Well there are 6 things to check.

Rental Property Insurance Declarations Page – The quick and dirty

6 things to check on your declarations page

When looking at an insurance policy a great place to start is the declarations page because it’s usually what’s at the top of the stack of papers you will get. It is the one that you need to review most carefully. Why? Because it tells you VERY important things such as:

  1. Who is insured – You, your wife, your LLC, your corporation, “who.” This is who will get paid. This is who will be covered. Make sure this is right.
  2. What is insured – This will be the “location.” Does this match the address of your rental property? If not, you are opening a crack, and your property may not be insured.
  3. Then it will break down the coverage parts of the policy, and explain HOW MUCH. So it might say: Coverage A – $100,000. Is that the value of the property? It’s an important question. This is the maximum that you will be paid. So make sure you understand it.
  4. Then it will explain the deductible. Two thoughts here. Can you afford this deductible? Do you keep this cash on hand? What’s the relationship between your deposit and your deductible? If you don’t keep cash on hand, you should consider having your deductible equal you deposit.
  5. Next, it will explain how the home will be fixed, or the loss settlement provision. Kind of important. What will the company pay you. This is an important concept. Don’t get a great deal on an ACV policy only to feel the pain and what replacement cost once you have had a claim.
  6. Finally it might list any applicable endorsements. Understand what these are. Endorsements change the coverage. It could be that the endorsements are providing you awesome coverage… it could also be that they are taking away something really important.

Riveting… I know, but this is what drives all else in the policy. If you have a loss, it’s the first thing the adjuster will review. “This policy covered the home at 123 Happy Street in Pleasantville. Is the house that burned, at that address? Yes? This policy covers the house for $100,000, and that is the most we will pay.” Everything starts at the declarations page; it drives the policy. If you do nothing else review it, and make sure the declarations page is correct.

Start your quote online now, and you can have a Rental Property Insurance Declarations page in your hand in no time.

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ABOUT GILA INSURANCE GROUP’S REAL ESTATE DIVISION

The mission of Gila Insurance Group LLC when it comes to investors is to be the insurance team member of choice for real estate investors that invest in single family homes as rental properties or seasonal homes, to educate real estate investors on how to protect their investments and cash flow properly in order to avoid catastrophic effects on their business and investments, to protect these investments with the best insurance coverage available, while offering value as defined by quality coverage and affordable prices, to act in the best interest our clients by being honest, accountable, and service oriented, and most importantly to have fun and creating lasting friendships while helping people be Covered Investors!

Why start with our Mission Statement? Partly because we feel it explains why we exist and what we are passionate about. Real estate is one of the single greatest investments known to man providing an amazing mix of asset appreciation with consistent return on investment through monthly cash flow. Many of us have stumbled into real estate investment and have become landlords by accident, others of us are investors; the difference is purpose and education. While we don’t claim nor desire to be the place for information on real estate investment, we do aspire to educate investors and landlords alike on the risks that they face as real estate investors and how to best protect their assets and cash flow. Many times this is through insurance, although there are some risks that are uninsurable and the best risk mitigation method is through education. Regardless having an insurance professional as a part of your investment team is invaluable to ensure you don’t lose your investment.

For those risks that are insurable we strive to provide the best insurance value by representing multiple insurance companies to ensure you get the best coverage at the best price possible. We only represent insurance companies that carry an A-rating with an independent auditor such as A.M. Best Company so as to make sure our partners are financially able to keep their promise to you.

While we would love to tell you that everything will always go off without a hitch, we live in a real world where stuff happens. But we are committed to being honest in all situations, accountable for our actions in our dealings with you, and we will be service orientated. You matter, let us show you.

Finally we’re not robots, we like people, we know if we trudge into work it shows. We do work that matters, we protect your investment, we enjoy it and it’s always more enjoyable with we can work with friends.

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Insurance For 10 or More Rental Homes

Successful real estate investors understand the concept of Rinse and Repeat. That is, finding a real estate investing method that works for them, implementing it successfully, and doing it again and again–increasing cash flow and building a legitimate business. For those of us that believe the buy and hold rental model is best and hold 10 or more rentals, insurance can flat out be a pain in the butt. Multiple policies, managing renewals, is just not a great way to spend time when you have a business to run. Imagine a SINGLE policy with all your properties listed, ONE payment, ONE renewal, less paperwork, fewer headaches and better prices on insurance. That’s the 10+ program. It has great coverage options including coverage for:

  • Your home and other structure
  • Your business personal property such as appliances and other landlord furnishings
  • Business Income that protects the loss of your rents if you have a covered loss
  • Liability and Medical Payments
  • Service Line Coverage (protection for the utility lines that run to the house)
  • Breakdown Coverage Option (Coverage that can help replace a broken furnace or repair a washing machine)
  • Flexible deductible options for high cash flowing investment businesses

The program is designed for single to six family dwellings that have no more than two stories. While the bulk of the properties need to be these one to six family dwellings, we can also include condos, manufactured homes, and vacant dwellings (for that occasional fix and flip investment) as long as they are not vacant for 24 months. It is easy to see why investors with multiple properties choose to go with this program. It saves money, increasing your cash flow. It saves time, by eliminating paperwork, and provides great protection for your investments! Start simplifying your insurance life with our 10+ program. To get a quote call us to start the process at 1-877-784-8767 today!

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Why Protect Your Investment?

When many investors look at insurance, they simply see it as an expense item, something to drive down cash flow. While we are all looking to maximize cash flow, insurance protects the cash flow that can be obtained during the time you hold the investment.

The first thing insurance protects is the house itself, the dwelling as it is often referred. What is covered? The truth is that it varies based on what you buy. In short there are several levels of coverage. The most commonly purchased coverage for rental investment properties is the DP-3. This policy is similar to an owner occupied HO-3 policy in that it is a special form which means unless the loss was excluded, it will be covered. It is the broadest coverage you can purchase for your investment property. Typical losses like fire, theft, wind and explosion are covered under this policy. There are always some exclusions, and some of the more worrisome exclusions include flood, earthquake and landslide. In most cases, this coverage can be procured, but with a separate policy.

So you have the primary cash producing asset covered. Next are the adjacent structures. These include detached garages, sheds, fences, retaining walls, pools and anything that is that attached to the structure itself. For a lot of rental properties, your desire to insure these items may be limited; however, most DP-3 policies include a limit equal to 10% of the value of the dwelling as coverage for adjacent or “other” structures.

The next piece of coverage for landlord properties is the landlord furnishings. This includes appliances such as refrigerators, washers, dryers, microwaves, ranges or ovens, dishwashers, etc. It also includes any furniture provided to the tenants such as couches, beds, etc.

One of the most important coverage for investors is the fair rental value. If your investment property burns to the ground and you then build a new house, you are out the cash flow that you would have had otherwise received while the home is being built. Yet you are still on the hook for the mortgage. How do you protect yourself? With coverage for the fair rental value, this will pay you as if you had a renter occupying the property.

Liability coverage is a must in today’s society. As an investor you have assets you must protect. Many have learned that separating properties from personal assets in the form of LLCs is a great risk management tactic, but it’s not enough. When sued you will want liability coverage that will not only pay for damages you are legally held liable for, but will also pay for your defense costs. Both the damages and defense costs can be extremely high. As such, it is always a good idea to purchase an umbrella policy, which not only increases your limits of coverage, but also provides coverage in situations where the primary policy will not.

Finally there is medical payments coverage. What happens when someone gets hurt and incurs medical bills? Oftentimes the insurance company will actually pay for the medical damages, so as to say, “we have taken care of you, don’t sue us.”” When it comes down to it, insurance is an expense item, but an important one.

When done right it can ensure you can enjoy the cash flow from your investment for a long time to come, regardless of what mishaps occur.

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