Protecting your investment property starts with insurance, and today we’re talking about why landlord insurance is so important. Without the right insurance policies in place, you’re putting yourself, your property, and your tenant at risk.
Switching from Homeowner’s to Landlord Insurance
If you were living in your rental property before you decided to lease it to tenants, you need to contact your insurance agent or provider to inform them you are no longer occupying the property. Tell them that it’s being rented out to tenants, and you need the appropriate coverage. Your homeowner’s insurance covered your dwelling and all of your personal contents inside of the home. With a landlord insurance policy or a rental insurance policy, you’re protecting your dwelling, and you’re also protecting yourself from liability.
Making the switch is necessary, and something you should do before you even begin to market your rental property. If you don’t change your policy and you need to file a claim, it may be denied if you aren’t up to date.
Landlord Insurance and what it Covers
The major difference in the landlord coverage is that the tenant’s belongings will not be covered. Your possessions were covered as an owner-occupant, but your rental policy will cover your investment, not the private items that belong to your tenant. Make sure you get a policy that provides enough liability coverage for you. Becoming a landlord opens you up to a lot of risk, and you want to be sure you’re protected against any claims that might come from your tenants or their guests.
You’ll also need loss of rent coverage, which can only be found with a landlord policy. If something catastrophic happens to your home and your tenants have to move out, you won’t be able to collect any rent while it’s being repaired. Insurance will cover your lost rent.
Working with a Property Management Company
If you have an Ashburn property management company, make sure you add them as an additional insured. There will be an interested party option, but additional insured is better. It shouldn’t cost you anything more, and you’ll help yourself and protect your property by providing a unified defense if a tenant or other claimant ever brings a lawsuit against you. Your property management company has their own insurance, but it’s helpful if there is one policy that covers everybody who is responsible for your rental property. It will save you a lot of money and time if you have to defend yourself against a claim or a lawsuit.
Finally, consider talking to your tenants about renter’s insurance. It’s a low-cost way for them to protect their personal property while they’re living in your property, and many renter’s policies include liability coverage for tenants as well.
If you have any questions about insurance, don’t hesitate to contact us at Castle Property Management.
