Renting out your property is no doubt a profitable endeavor, but just like any other business venture, becoming a landlord also carries some risks. There are serious risks associated with renting out a residential or commercial building. You are entrusting a major and most probably the most valuable asset of your life to people who you hardly know and who have nothing to do with the regular repairs and maintenance of the property – unless the damage is caused by their carelessness. However, you can avoid all potential risks attached to your rental property by insuring it.
Homes are usually covered against damages under the label of homeowner’s insurance. However, homeowner’s insurance stops offering you protection against potential damages as soon as you rent out the home. To make sure that your home is secured against damages and maintenance after having it rented out, you have to get Rental Property Insurance. This kind of property insurance covers damages to your home caused by any natural calamity, such as fire, flood or hail storm. It also offers coverage for personal liability and covers all the legal expenses you may face due to injury claims made by your tenants.
Your existing homeowners insurance policy may cover rental unit as well
Usually the homeowner policies do not cover rental properties, but there are some insurance companies that offer coverage for up to two rental units. Check if your existing homeowner’s insurance covers rental property. If your existing policy does not cover the rental unit properly then it’s better to switch to qualified commercial broker to get the property properly insured.
Add special coverage for the appliances
Rental property insurance usually covers damage to the structure of the house only, and not to the home’s interior furnishings and appliances. If you are renting out the house fully furnished then it is recommended to add special coverage for furniture and electrical appliances such as dishwasher, refrigerator and clothes dryer etc.
Protect your rental income
Accidents do happen, and if the tenants have to vacate the rental unit due to some serious damage to the property your source of income will go with them, so it is better to protect your rental income.
Do not forget to protect yourself and your property from litigious tenants by applying for liability coverage.
Employer’s liability coverage
If you have hired a staff to take care of your rental property on your behalf then it is recommended to add special coverage against claims filed by your employees.