Whether you own one rental property or 200, you want to make sure you and your investments are properly protected. Global warming increases natural disasters. They are becoming more common, 2018 was the fourth-costliest year for natural disasters in history, according to MunichRe. They cost $160 billion, of which only half was insured. As a property owner, it is important to have the right insurance policy to protect you from any financial losses. It is vital that you understand your insurance and how it does and doesn’t protect you. As a landlord, your insurance will be different from homeowners insurance. Good protection is an insurance policy that will cover property damage, liability, and lost rent if the property becomes uninhabitable. Here are some insurance policies for landlords:
Property protection covers damages to your physical property. You want to make sure to get an all-risk policy. Landlord property protection policies typically provide coverage for damages caused by:
- Other types of incidents
Standard landlord policies typically do not cover flood damage. If you live in an area where the risk of flooding exists we advise you get a separate flood insurance policy.
Personal Property Protection
Landlord personal property protection covers personal property left on-site for maintenance or tenant use, such as appliances and lawnmowers. A landlord policy will not cover the tenant’s property. Your tenants will need to have their own renter’s insurance policy. Requiring renters insurance is in the owners best interest. It benefits both the tenant and the landlord. Renters insurance minimizes the risk of being sued by a tenant. If damage occurs because of faulty wiring or flooding, a tenant without insurance is likely to blame the landlord and possibly bring them to court. If the damage is covered by insurance, the tenant has little reason to ask the landlord to pay.
It is important that your landlord policy includes liability coverage. This coverage protects you against liability claims and lawsuits. If a tenant, visitor or even a trespasser gets injured in your rental property, you could get sued. Liability insurance will help you cover the costs associated with bodily injury claims on your property. Such as medical payments, funeral costs, legal fees, and judgment or settlement costs. It’s important that you confirm in writing with your agent, that the home will be rented to insure you have the proper coverages.
Rent Loss Protection
If your property gets damaged and becomes uninhabitable your rent loss protection will cover the lost rent and pay you the amount of money you would have made in rental income.
You can choose to not have any insurance problems by hiring a property management company. At CRM Properties we have the experience, tools, and resources to effectively manage your property.