Renting out your property is a good source of income and wealth building. However, it is imperative that you have the necessary insurance coverage to protect you in the case of any eventuality.
Some landlords often mistakenly assume that their homeowner’s policy is enough to cover them. This is not true at all. In fact, many people will find out about this when it’s too late and they have a “situation” in their hands. Don’t be one of them.
As long as you’ll be having renters in your property, you need to take all precautionary insurance measures to protect you and your property. The following are the major types of insurance policies every landlord should have:
Standard Landlord Insurance
This insurance policy is designed to cover the property, the grounds, its doors, windows, garages, and other structures in the compound.
So, in the event of damages, fire, flooding, partial collapse brought on by bad weather and so on, the insurance policy covers the cost of rebuilding or repairing the structure. This is the most common of all landlord insurance policies. This is usually where most landlords stop with their insurance policies.
Property Contents Insurance
If your apartment or building comes fully furnished, you need property contents insurance that will cover any damage loss or theft of the property. It is always better to choose the option of replacing these items with newer versions of the items as against the exact same items bought new.
For instance, if thieves were to break into your property and steal the installed TV and microwave that you bought four years ago, it’s always better to choose an insurance package that will replace a newer, more current model as against that same model you bought.
Water Damage Insurance
Renters can be forgetful and leave the tap on when they are not at home. Your property may also suffer from plumbing leakages, backups, sewage spills and so on.
If this happens and your property suffers from some sort of water damage, this optional package will be the difference between spending a lot of money out of pocket and getting the payment from the insurance.
Please note that this is exclusive of any flooding incidents caused by natural disasters. If your property is in a flood-prone area, you will need to get a separate flood protection policy.
People can suffer injuries or accidents on your property. If this happens, you’ll need landlord liability insurance to take care of the costs. It’s not safe to assume anything as personal injury claims have become even more rampant these days.
This is not surprising seeing as many personal injury attorneys are always looking for people involved in accidents in the bid to help them get some compensation. Whatever the case, having a liability coverage protects you from tenants looking to make a few bucks from their injuries.
Insurance for Lost Rent or Income
This insurance coverage is meant to protect you and provide the lost income if the property gets damaged or something happens to it that makes it impossible for you to lease the property out.
Insurance Cover for Legal Expenditure
Some tenants are litigious in nature. They may want to sue you for any and everything. The legal expenditure insurance coverage is meant to cover all expenses whenever you have disputes with the tenants and you have to take the matter to court.
Please note that some or all of these could be bundled into your standard landlord’s insurance policy. But don’t take them for granted. Check the policy for all of that. If they aren’t there, talk to insurance agents at Insurance Land to see if you can help you.
Oscar King is a freelance writer and landlord who has been stuck in some sticky situations with tenants. He enjoys repairing and renting out homes, but also while covered. If you would like to learn more about Oscar, you can check out his Google+ profile.