Have you ever had someone break your property, steal from you, or even get hit by a car on your rental property? If you own a rental property, like many others, you’ve probably wondered what you would do if it got destroyed by some accident or crime.
What would you do financially, and how would you do it? That’s where homeowners insurance for rental property comes in.
What is it? Keep on reading, and we’ll tell you everything you need to know about it.
1. Flood Insurance
Adequate insurance is essential to properly protect the property and ensure that all the tenants are safe. When it comes to flood insurance, it is important to note that this type of policy should be tailored to the specific property.
Homeowners’ insurance policies typically do not cover damage to rental property. Such damages are caused by flooding and thus it is essential to make sure that the rental property has its flood insurance policy. This is on top of insurance for homeowners.
Coverage should also be extended to any fixtures or furniture on the property. Before signing an insurance policy, have the policy and coverage options clearly outlined. That way, all the tenants and landlords have a clear understanding of what is and isn’t covered in a flood situation.
2. Premises Liability
Premises liability is a legal term used to describe the responsibility that a landlord is held to for the safety of their tenants. Homeowners’ insurance should include coverage for premises liability. This is to protect the landlord from potential lawsuits if an incident occurs on their property that results in injury.
In addition, the policy should also provide coverage for damages related to:
- weather
- fire
- theft
- other risks
It is also important to understand that some states require landlords to carry certain levels of insurance when renting out their property. Knowing the laws in your state and ensuring that the proper coverage is in place is essential for any landlord. Investing in homeowners insurance for rental property is an important step for reducing the potential liability of a landlord.
3. Business Personal Property
Business personal property coverage protects the equipment, furniture, and other property used exclusively in the rental property. This can include items like:
- stovetops
- refrigerators
- furniture
It also includes other properties used in the rental. It’s important to note that these items must be owned exclusively by the landlord, as they are not covered under a tenant’s renters insurance.
Business personal property coverage also typically applies to any damage to the property sustained by renters or their guests, with some exceptions. Landlords must review their policies. This is to make sure it covers their specific needs. And that is because some items, like valuable furnishings and electronics, may need to be added for separate coverage.
Understanding the Value of Homeowners Insurance for Rental Property
Homeowners insurance for rental property provides added security and value for investors. It also provides peace of mind that their property is covered and they can gain a financial payout if there is an unfortunate event. To learn more about homeowners insurance policies, contact a local agent to understand the complexities of rental property insurance coverage.
For more reads aside from understanding the types of insurance for rental properties, visit our blog.
Read more articles at Ibomma News