Having one or more rental properties is a great way to make a great income at the end of the month. However, you do need to have Landlord Insurance for them to protect yourself from various types of risks. If you plan on buying property and then renting it for a profit, then you should certainly think about getting landlord insurance. This is absolutely necessary and in most cases, it’s even mandated by the law
Prior to getting insurance for these properties let the insurer know if your dwellings are furnished and provide them with as much info as possible to ensure you get the right amount of coverage for them.
Why getting landlord insurance is important
Purchasing landlord insurance for your rental property
Getting landlord insurance is not only going to protect your rental unit or home, but at the same time it also provides you with plenty of coverage in the event someone files a lawsuit against you (as a landlord).
What’s great about landlord insurance is that it covers everything in your home, but also features liability coverage which protects you in the event of judgments or lawsuits. If you already have a homeowners insurance policy, then you’re probably aware of the fact that the coverage it offers is extremely poor by comparison.
It’s important that the rental home insurance provides adequate coverage for your property. Before you agree to a specific policy, you need to ensure that the agents carefully calculate the cost of each good (including washing machines, computers, laptops, refrigerators and so forth) in your home in order to be aware of its replacement cost should it get damaged after you’ve already purchased the policy.
Keep in mind that this type of coverage doesn’t include the land on which your property stands on. Be sure to also keep in close communication with the agent in order to let him know about any particularities regarding your hardwood flooring, ceramic tiles or porch that may impact their replacement cost. If your property is empty, then the coverage amount for such items should be kept as low as possible.
If along the way you may decide to buy a refrigerator, a stove and other similar goods be sure to speak to your insurance agency about it so they can update your coverage accordingly.
If your property becomes inhabitable due to a covered loss, then the insurance should cover you. Consequently, if your home is damaged to the point it’s deemed unlivable or is destroyed, then the policy needs to cover you for loss of income.
Rental Property Insurance needs to also provide you with landlord liability protection. As a landlord, you’re certainly not going to be around your property 24/7 and this means that over time, issues that you’re not aware of can slowly develop to the point where they cause significant amounts of damage to your property, even though you had nothing to do with them. In this case, it’s best that you purchase umbrella coverage. What’s great about it is that it provides you with a lot more coverage than a standard landlord insurance policy.
Note:
In general, many tenants think that landlords are very rich and because of that, if they get injured in your property, then they are generally going to file claims and demand substantial amounts of money from you. To avoid that, ensure that your property is inspected at least once a year.
Getting Rental Home Insurance for your basement apartment
Anyone who plans to rent a basement apartment or maybe a part of their house should first of all get in touch with their insurance agent about it. If your home has multiple entrances, then you may have to buy a policy for it. Therefore, it’s best that you get in touch with your insurer in order to learn more about the best type of policy you can purchase for your property.
Claims under your landlord insurance
If your home is damaged or destroyed as a result of an explosion, water damage, fire damage, etc, then you should get in touch with your insurer as soon as possible. Make sure that tenants are evacuated from the building and that all your belongings are also removed to prevent further damage to them. To help calculate your losses, you need to provide your insurer with a copy of your lease or any other types of documents that may assist this process.
On top of that, you should also get in touch with various home repair services in order to get quotes for repairs. In order for the repairs to being right away, you also need to keep your insurance adjuster updated on these matters.
Note:
If your tenant informs you about a possible danger at your rental unit, you should immediately address it. In fact, if you do nothing about it, then you could end up paying tens of thousands of dollars in the event the tenant sues you. If someone already filed a lawsuit against you for injury or damage that took place in your property, then you should seek the services of an experienced lawyer.
Don’t forget to also ask about the personal injury protection coverage which usually provides coverage for wrongful eviction, slander and libel.
At the end of the day, for a small monthly premium, you can have the peace of mind that you’re fully covered if something unexpected may happen to your property and/or your tenant.
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