Rental Property Insurance

Get the facts on insurance for rental properties

Rental property insurance is very important but often diverse and complicated. Every rental property will need to be insured to protect the structure and the belongings within it, but what if a tenant holds you liable for an injury or negligence? What happens if there is a flood? Find out the extent of coverage you will need for your residential or commercial property, and how to get a lower rate.

Types of Insurance for Rental Property

There are two very good reasons for any landlord to take out rental property insurance. First, you will want to cover any damage to the building and its contents, though protecting yourself from legal and personal liability is just as important. Although the tenants will be responsible for any property damage or personal injury that occurs in their apartment or condo rental, a variety of financial concerns can fall on the landlord’s shoulders.

Landlords are typically more vulnerable to financial risk than conventional homeowners, and so landlord property insurance can become a complex and pricey issue. You will be expected to maintain a safe and secure living space for your tenants, and everything from nasty weather to unfortunate accidents can affect their living conditions. If your liability insurance package covers legal expenses, you can rest assured that you have a financial safety net in the case that a tenant or visitor decides to sue you for damage or injury. And if the building is severely damaged, your property insurance will help to cover repairs and compensate you for your lost rental income for the duration of the repairs.

For those who rent commercial property for their business, you will need to protect your company’s assets. Many business property insurance plans are designed to cover damage from fire or natural disasters, which will help to replace damaged fixtures, equipment and furniture. Check with the building owner before you purchase your commercial property insurance—you may be covered by the owner’s policy, but you will likely need some extra property insurance to cover any equipment that you own.

How to Choose Rental Property Insurance

Since there are so many different types of rental insurance available, it is a good idea to take some time to consider your needs. A comprehensive plan will cover most situations, while peril policies generally cover fewer types of damage. The price of your policy will essentially depend on the risk you are willing to take and the amount that you would be willing to pay should damage occur. For instance, a higher deductible means that your payments will be lower, but you will have to pay more out of your own pocket for any repairs or lawsuits.

There are several ways to minimize your insurance costs, beginning with an accurate calculation of your property value. Property value includes the cost of the building and the land that it sits on, and so you will want to determine how much it would cost to simply build the structure again to find a lower property insurance quote. You may also be able to save some money by extending your existing policy for your main residence to a rental property.

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