Tyson Properties, Inc.
Insurance is a necessity for investment property.You pay for property insurance with the hope that you will never have to use it for unforseen events. With all the different emergencies, disasters, or problems that happen to a rental property, it is important a property owner have the best coverage possible.
- When did you last review your insurance policy for your rental property?
- If you previously lived in the property, do you still have your homeowner's insurance covering the property?
- Do you have a rental/landlord policy?
- Have you shopped your insurance lately?
- Do you have enough coverage in the event of a fire or disaster?
- Do you have enough liability insurance?
- What items should the liability insurance cover?
- Where is my policy going and who is making the payment?
- What about insurance for the tenant’s contents?
If it is not within the last year, you should take steps to review your policy immediately and discuss the current coverage or needed updates with your insurance agent.
If you resided in the property, moved out and never changed your policy, part or all of your insurance could be invalid.
A rental/landlord policy is a basic fire and liability policy with some “extras” to protect landlords. This is important if you have vandalism, fire or any other natural disaster. It is crucial that your policy pays for lost rent if a property requires rebuilding or rehabilitating.
It's an excellent idea to get competitive quotes, but do not let your insurance lapse while researching other rates. Many companies are continuing to renew existing rental/landlord policies, but are not issuing new policies because of high profile problems such as mold or natural disasters. Only discontinue the existing policy when you are certain you have a new insurance policy in place.
Perhaps you haven't updated your policy in several years and the insurance coverage is now less than the current replacement value of the property. Research your current property value with a reliable source.
Increases in liability are normally very small in cost per $100,000. In today's market where people are prone to sue for any reason, a policy with $100,000 covers very little when it comes to attorneys fees and costs. A $1-2,000,000, or more, umbrella policy is highly recommended, but consult your insurance agent. Beware of misleading captions, such as "all risk". Often these policies contain a long list of things that are excluded.
A fully comprehensive policy will cover injuries on the property, defense of personal injury lawsuits, slander, discrimination, unlawful and relatiatory eviction, and invasion of privacy for tenants and their guests. It may not be possible to obtain all these coverages with an insurance company, but landlords should try to obtain the most coverage possible.
It's very important to make sure your insurance policy and/or appropriate copies are going to correct addresses, such as the mortgage company, property manager and of course, you. Mortgage companies are quick to put on an expensive insurance policy to cover the loan because they believe your insurance has lapsed. Your agent can assist you with all of this.
Don’t wait until a problem occurs. To be satisfied there is adequate coverage for your property and to reduce your liability, review your policy on a yearly basis with your insurance agent.