Rental Property Insurance: Things to Understand

Posted by dawson12 on January 8th, 2015

The decision to rent a building or even a room in your home is not a small one. You have to take care of many things before entrusting it with a stranger.

Beware of accidents

When someone else manages your home, you should do everything you can to stay safe from possible dangers. The renter/s can spoil your carpet, flood the entire flat or even cause trouble to your neighbors. Even if the inconvenience is small in nature, you are expected to take care of the situation. Bearing the cost of repairing on your own is not going to be a pleasant experience if you are an average landlord. You may choose to trust your tenants; they would not cause even the slightest inconvenience. Still, you should show a slight concern for your wallet; buying a property requires a huge initial investment. When combined with regular maintenance, lack of protection may leave you blank at one time or the other. The best way to prevent this disaster from happening is to take out the insurance policies based on a thorough evaluation of possible risks.

Two kinds of rental property insurance

Rental insurance policies generally fall into two categories; short-term and long-term. The decision to rent out your home for a short period of time would present you with two scenarios.

  1. Certain insurance providers allow you to rent out your home for a short period of time if you notify it in advance.
  2. You may also face a situation where you are required to pay an increased premium for the purpose.

Know that homeowners policies in general restrict the users from doing any kind of business activities in their homes. If you wish to rent it out, you have to acquire at least bed and breakfast coverage.

When it comes to long-term rentals, you need a landlord policy. The premium would be a bit higher because landlords need to be more alert when compared to a general homeowner.

A few suggestions to consider

Here are a few must-have policies if you are planning to rent out a home or any other building for a long time.

  • Landlord contents coverage: This takes care of your belongings when they get damaged for any reason. Remember, you don’t have to insure what belongs to your tenants. They will take care of them.
  • Buildings coverage: As the name suggests, it protects the building. The policy bears the complete cost of repairing or replacing for the damages natural calamities like flood can cause to your property. This is the most assured peace of mind you can have. There is no limit to what you can get as compensation in this policy.
  • Liability insurance: This too is a must if you wish to stay safe from injury claims. Surveys show that these have been on the rise nowadays. Take a decision only after assessing the possible risks for your property.

Rental property insurance may appear expensive when compared to their general variants. But, the peace of mind which comes from the assurance that nothing would go beyond your control is truly great!

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