Protecting your property is always important when you’re renting out an investment home, and one of the things you need to do is ensure you have the right insurance. Today, we are going over the coverage you need in a comprehensive policy. Discuss these things with your insurance provider so you know your property is protected.
As a landlord, it’s your responsibility to insure your investment property.
Liability Coverage for Landlords
One of the most important types of insurance you can have when you’re renting out property is liability insurance. It’s crucial that any landlord policy you buy includes plenty of protection against liability. If your tenant becomes injured while renting your home and tries to sue you, this coverage will protect you against potentially large financial losses.
Coverage for Alternate Accommodation
Think about what might happen if your property becomes damaged or uninhabitable for any reason. Your tenants will need to live somewhere while repairs are being made. This is where alternate accommodation coverage is useful. When you have it, the insurance company will pay for the tenants to live elsewhere while the maintenance work is performed.
Standard Structure Coverage
Obviously, you’ll need standard insurance that covers your structure and the cost that may be involved in rebuilding it should something catastrophic happen. This is usually referred to as a dwelling policy or simply as a landlord policy. It covers the home and all of its systems. One thing to keep in mind is that you’ll need to be sure your policy reflects that you are not occupying the home. If you once lived there and had a homeowner’s insurance policy, you’ll need to convert that to a landlord policy.
Your homeowner’s insurance policy won’t cover your rental home. There are several differences between a homeowner’s policy and a landlord policy. For example, the liability coverage is higher when you’re renting out a home rather than living in it. And, the tenant’s personal possessions will not be covered the way your own personal possessions were covered with a homeowner’s policy.
Loss of Rental Income Coverage
If there’s a fire or a flood at your home or a hurricane sweeps through the state and damages your home to the point that your tenants cannot live there, you’re going to face a loss of rent that can be damaging to your financial situation. A loss of rental income insurance policy will protect you against this possibility, and ensure you are able to meet your financial responsibilities even if you don’t have any rental income from your tenants.
One thing to keep in mind is that landlord insurance policies are tax deductible. We highly suggest consulting your insurance provider to ensure you are fully covered and protected. It’s also a good idea to talk to your tenants about renter’s insurance. Those policies are inexpensive and can protect their own belongings against any loss.
As always, if you have any questions at all, please feel free to contact us at The Listing Real Estate Management. We’d be happy to help with any Orlando property management needs.