A Landlord’s Guide to Rental Property Insurance
Are you the owner of a property for rent, or are planning to own a property for rent? If you do, this article will help you get a better understanding of landlord insurance and some of the coverage policies that are often overlooked and not given much attention to. When you have a property that you are holding for rent or lease, you are in it to make a profit and to realize appreciation in your property value, not because you enjoy dealing with your tenants. Rental properties can lead to expenses that are quite overwhelming, especially when you consider other expenses and payments that go with it such as the mortgage, insurance, and repairs and maintenance. Rental properties can provide you with a steady stream of income when done right, although you must always be aware of the risks involved when it comes to this type of business venture.
Asset depreciation, tenants who are destructive, and unexpected repairs are just some of the things that many landlords have to deal with. The proper landlord policy is one good way of containing these risks. There is a bit of confusion surrounding standard home insurance policies and landlord policies, and a lot of people cannot tell the difference between the two. In both coverage, a lot of the policies are similar but there are also a few things that differentiate the two.
For a lot of landlords, they normally rent out their homes which they have lived in already and with that, they have already purchased insurance policies for it which is one reason they do not understand the need to get a separate insurance policy for landlords. One of the most important reasons behind the need for a landlord’s insurance policy is that in the event of a claim, you want to make sure that you are properly covered. When you start to rent out your property, any claims made against the insurance policy can be denied by your insurance company as you did not exert the diligence required in informing them of the property’s change in status.
Liability protection is an important coverage that you will get from your landlord insurance. When a tenant causes damage to your property or to other properties in the vicinity, claims can be made against your policy and a landlord insurance policy will be able to cover such damages. Most landlord insurance policies will provide protection ranging from $100,000 to $1,000,000. As much as possible, go for a policy with a higher insurance coverage as it will only cost you a few dollars more each year.
Another important coverage is for the loss of rental income. A lot of landlords count on the income from their tenants in order to pay for the mortgage due on their properties. In the event of damage to the property that renders it unlivable, policy coverage can reimburse you for the income you would have earned while your property was being repaired.
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