How to Insure Rental Property
Whether you are a first timer, renting out your residential unit or an experienced real estate investor with multiple rental properties, you should protect your property against potential damages by insuring it. Homeowner’s insurance stops offering you the coverage you need as soon as you rent out the home, and you have to get Rental Property Insurance to make sure you are secured against damages and maintenance costs and do not lose the money you are making from the rental property.
A rental property insurance covers damages to the estate from fire, flood, hail and other natural calamities and dangers. It also includes coverage for personal liability and bears legal fees due to injury claims made by the tenants. It also covers medical expenses and you will paid by the company if a visitor gets injured on your property, especially when conducting viewings. Rental property insurance also compensates you for the loss of rental income. For example, the company will pay you rental income if the rental unit is being repaired due to damage from a covered loss. After reading all these tempting benefits of insuring a rental property, you must be thinking how to insure your own rental property. Here is the procedure:
Start by checking if your existing homeowner’s insurance policy covers rental units. Usually the companies do not cover rental units but there are some insurance companies that extend coverage to a couple of rental units. If your homeowners’ insurance policy does not cover the rental property adequately then seek help of a qualified commercial insurance broker to get the property properly insured.
If you are renting out the property fully furnished then make sure your insurance policy covers all the contents, from furniture to electrical appliances. Also add special coverage for the appliances that are at a higher risk to damage, such as dishwashers or clothes dryers.
Do not forget to protect your rental income in case of any major loss that can cause the tenants to vacate the premises.
Consider liability coverage to protect yourself and your possessions from controversial tenants.
If you are hiring services of people to work on your rental property then seek an adequate employer’s liability to cover claims filed by any of them.
Note: Rental property insurance is also helpful if you are renting out your home temporarily or are leaving the city due to permanent change of station and have not sold the property.
