3 things you should know about rental property insurance as a landlord

By David ClausenFind us on Google Plus

Rental Property Insurance

Rental Property Insurance

Flood Insurance

This may be obvious, but rental dwelling insurance policies do not cover flood insurance.  To obtain flood insurance you would need a separate flood insurance policy.   Don’t waste your time checking around for price though, when it comes to flood insurance the rates are ultimately set by FEMA and the NFIP and shouldn’t vary from agent to agent.

Premises Liability

Many investors choose to put their investment homes in the name of a corporation, usually an LLC, to limit liability to them personally.    While this is a savvy investment move, most insurance companies will limit liability (trip and fall coverage) to the premises only.  If the LLC that owns the property also has operations off premises, let’s say another rental home, you could be putting the LLC at risk.

Business Personal Property

Some landlords choose to rent a home furnished  with access to a washing machine or dryer, while this can bring in more rental income, most insurance companies don’t offer coverage for these items unless specifically requested.  Ask your agent to increase the business personal property coverage, sometimes known as BPP coverage, to the amount that you feel it would cost to replace those items. 

Insuring your income producing property is not rocket science.  Make sure you check the entire insurance market for the best rate from the highest rated carrier and ask questions regarding flood insurance, liability coverage’s, and business personal property limits to make sure you know what you are getting from the insurance company.