Are you considering investing in property that can be rented out? Or perhaps you’re moving and planning on renting out your existing home? Whether your plan is to rent the property for seasonal, annual or as a commercial rental, you’ll want to invest in a good insurance policy. After all, you’ve invested money in the property, and once you become a landlord, you become liable for all sorts of potential instances that could result in litigation. You’ll want to be prepared by shielding yourself from possible liability.
A good landlord insurance policy should cover the top three categories of:
- Property Damage. Natural disasters, fires, destructive tenants and robbery are all possibilities. The price tag on these can add up quickly. You will want your policy to offer replacement value or replacement costs as opposed to a policy that offers actual value. This is especially important if the dwelling is older where the contents, appliances, fixtures, etc. have greatly depreciated in value.
- A liability policy is a landlord must. It will cover both the legal and medical costs should your tenant or one of their visitors become injured on your property. This could result from something as simple as a fall as a result of a paver that was uneven with the others.
- Loss of Rental Income. This protects you from events that cause your property to be considered uninhabitable. This condition could result from mold, a sinkhole, or animal/pest infestations. Granted, this is a temporary reimbursement of rent you would be receiving if the property was rented, but it can be a real lifesaver as it’s far better than going months without any income while the problem is solved.
The above are just the most common components of a landlord policy. There are multiple riders that can be added to your policy for more protection. You’ll want to talk to your insurance agent about the nuances of your property. For example, if the property is in an area that is prone to flooding during rainy season (ahem – certain areas of Pinellas, Pasco and Hillsborough counties), your agent may advise you to purchase flood insurance.
Florida gets hurricanes most years. In addition to flood, wind damage insurance may be something you’ll want to consider. Your insurance provider will take all of this into account when helping you land on the best possible policy for your needs. Take advantage of all possible discounts – bundle all of your insurance (auto, homeowner, landlord, etc.) with the same provider.
Bottom line is that if you decide to be a landlord, do it right from the onset. Vow to purchase a landlord policy that sufficiently covers your needs, keep the dwelling and property maintained and respond to tenant issues quickly and efficiently. Do talk to your tenants about them taking out a renter’s insurance policy that will cover their personal items in the case of disaster, burglary, etc.
Take pride in your property and you’ll be able to count on the extra income for quite some time! Your insurance provider will work with you to make that happen!
This information is not intended to be exhaustive nor should any discussion or opinions be construed as professional advice. Should you have any questions or would like to discuss your risk exposure with your landlord insurance, please contact the insurance pros at ARCW Insurance. We are here to help.