Because properties can vary greatly in many ways, an off-the-shelf insurance package won’t likely be the right fit. Your location, building specifics, and the number of dwelling units all may factor into your insurance policies. It’s important to understand the unique nature of your risks based on the type of property you are insuring.
Even with the most thorough credit and background checks, a tenant can default on their rent. It can take months or longer for you to take the legal action necessary to remove them and secure a new tenant. The whole time, however, you’ll still need to make your mortgage payments. Consider an insurance policy that may protect you in the event your resident defaults, dies, or is deployed, and cannot or does not pay their rent. Such a policy may also provide coverage for legal fees related to eviction proceedings.
From time to time, your rental property may be vacant. This could be due to tenant transition or renovations. Regardless of the reason, you need to make sure the property is covered appropriately. If you know your rental property will be uninhabited for some time, it’s important to find out if it will be covered under your existing policies. If not, consider obtaining a vacant property policy to cover you until a tenant moves in.
The cost of coverage may vary depending on a variety of factors, including the size of your building, where it’s located, when it was constructed, and the types of risks that are possible in your region.
Rental property insurance goes beyond what home insurance can offer, which is especially important for liability issues when renting out your property to others.
Of course, you’ll need to insure your building. But, to really be protected, you must be sure to consider each of your options. If your property needs extensive repairs or a full rebuild after a covered loss, you’ll want to have coverage that includes the additional cost of making sure it’s up to the current building codes. Most business owners and property insurance policies won’t provide coverage in case of a flood, so flood insurance should be considered. If your property is in an area prone to hurricanes or earthquakes, you may wish to obtain these policies as well. Finally, you should also insure against common business concerns, such as employment practices liability, cyber liability, and more.
To review your rental property insurance needs and to learn more about your coverage options, contact us.