Do you have investor insurance on your properties? Many people might wonder if this is truly necessary to maintain insurance on a property that they don’t primarily live in. However, you want to make sure that you keep adequate coverage on your rental properties in order to protect your investment. You never know what could happen to your home in terms of emergencies, disasters, or problems with a tenant.
Purchasing the right investor insurance makes a major difference in how your home will be treated in the event of an emergency. It’s time for you to review your investor insurance for the year if you haven’t already done so. Here are a few tips to help you get the best coverage possible from your investor insurance.
Check Your Coverage
The first thing you need to do is make sure that you have adequate coverage on the home now that it is an investment property. Make sure that you drop your homeowner’s insurance because it is likely invalid now that you no longer reside in the property. It is far more important for you to keep investor insurance on the property with a rental or landlord policy.
A rental or landlord policy is designed to help cover you in the event of a fire or other liability with a few extras like vandalism. You want to ensure that your policy covers lost rent if the building needs to be rehabilitated or rebuilt after one of these major events. Make sure that your policy offers enough coverage for the current replacement value of the property.
Liability Insurance
All landlords should have some type of liability insurance on their property. This can cover events like personal injuries on the property, slander, discriminations, unlawful and retaliatory eviction, and invasion of privacy for the tenants and their guests. Keep in mind that there may be some differences from this list in an individual policy but try to obtain as much coverage as possible from a new policy.
These policies are generally inexpensive compared to the potential value of the home. It is recommended to go with a slightly more expensive policy to cover you financially in the event that you should need this policy. Most experts will suggest an umbrella policy that covers up to $2,000,000 in legal fees. However, this is something that you should discuss with your insurance agent.
Tenant Insurance
Generally speaking, investor insurance is not going to protect any of the belongings of the tenant in the event of a disaster. It is advised that they carry their own renter’s insurance in order to prevent significant losses in the event of a fire or natural disaster. While this may be an optional purchase, it should be highly encouraged.
Selecting the right investor insurance can be a tricky process, so be sure to work with your insurance agent to find out more. Your insurance agent and Pyramis Company can make sure you have all of the rental property management services you need for your rental to be a success!