If you own a home, you already know you need homeowners insurance to protect your investment. But what insurance policy do you need to adequately protect your rental property?
Having the right insurance package can save you a headache in the long run. Here are a few things to know about insuring your rental property the right way:
Consider obtaining additional coverage. A standard homeowners insurance policy typically doesn’t cover damage that occurs when the space is being used as a rental.
Ensure your space qualifies as a rental. If you’re unsure about whether your situation is fully considered “renting,” contact your insurance provider. Different insurance companies have different rules for what qualifies as a rental, such as whether the person living there is a family member, whether the space has a separate entrance and how the space is attached to the main structure. Making sure you’re aligned to your insurance provider’s definition is key to choosing the right coverages.
Stay protected with Dwelling Fire insurance. If you are renting out your property for any length of time, you will need landlord insurance. Most landlord polices come standard with liability insurance, property damage and loss of income coverage, which reimburses you for rent lost as a result of the unit becoming uninhabitable. You can also take out additional coverages, such as flood insurance, to further protect your property.
Encourage tenants to get renters insurance. Although not required by state law, renters insurance is the only way your tenants can protect their belongings, because your landlord’s insurance won’t cover their personal property. It can also protect tenants from having to pay out of pocket for other common incidents like water backup damage and certain natural disasters – which helps you protect your investment.
Now that you have the full scoop on homeowners insurance for rental properties, it may be time to get a review of your homeowners insurance policy. We invite you to contact our office for a no-obligation review of all your insurance needs.