Owning real estate is often looked at as a stable and wise investment. After all, everyone needs a place to live, and providing a good home to families in your area is not only fulfilling but also has the potential to add a decent amount of monthly income to your bank account. Unfortunately, all your hard work could be destroyed overnight with one unexpected event. It’s important that you know what kind of insurance policies are best for landlords, so you can keep your investment protected.
Landlord Insurance
Homeowner’s Insurance typically only approves claims if the policy holder is residing in the home when the incident occurs. Landlord Insurance will protect your property, even when others are occupying the home. Most policies provide other benefits, such as Fair Rental Value Coverage which pays you rental income if the house is uninhabitable during renovations.
Personal Property Protection Coverage
Be sure that your policy includes Personal Property Protection. This is particularly important for furnished units, but also helps empty residences as well. Your rental unit probably has light fixtures, ceiling fans, blinds/curtains, toilets, bathtubs and expensive appliances. You don’t want to find out when filing a claim that you’ll have to pay out of pocket to replace these items.
Renter’s Insurance
It’s a good idea to require your tenants to purchase Renter’s Insurance. If they aren’t covered and they suffer personal property loss, they may be forced to sue for compensation. Asking those living in your house to have their own policy will help protect both parties from financial disaster.
General Liability Insurance
If a tenant or service provider is injured on your property, they may have the right to take you to civil court to pay for their medical bills, as well as current and future loss of income. Having general liability insurance will give you added protection if someone files a personal injury lawsuit against you.
Vacant Home Insurance
When a house sits unoccupied for a while, there are often negative consequences. The property may be vulnerable to squatters or curious neighborhood kids, who if injured could file a lawsuit. Also, without tenants to maintain the condition of the home, there might be an opportunity for mold growth, pest problems or rusted plumbing. Vacant Home Insurance will provide an extra layer of financial protection in case these issues cause you to need extra repairs or renovations before renting or selling it to another family.
Fire, Flood and Natural Disaster Insurance
Landlords need to be sure that their policies cover fire, flood and other disasters. Keep in mind that many basic homeowners or landlord insurance plans only cover flooding in the event of a burst water line, not flooding caused by a storm or overflowing lake. Think about what area your property is located in. What kind of natural disasters occurs there? For instance, it wouldn’t make much sense to pay for hurricane insurance in Illinois, but it’s a must for a home in Florida. Talk to your current insurance provider and ask what kind of options you have.
Umbrella Insurance
One of the best protections available for landlords is an Umbrella Insurance policy. If you discover that your regular policy doesn’t cover a certain situation, the Umbrella policy will kick in and cover the difference up to a certain amount. Property Management Atlanta
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