Homeowner’s insurance isn’t important until you need it.
Read below to learn how to properly insure your rental property and protect yourself and your investment.
Homeowner’s insurance can be complicated, but with the right information you can get exactly the coverage you need.
The following tips should help you get started:
Know what your master policy covers. Know exactly what your monthly dues are paying for and what you are responsible for on your own. Check your policy for coverage on water damage. Make sure you’re well covered for this because water damage happens more often than you think. Furthermore, taking steps to help prevent excessive water damage may help reduce your premium.
Take inventory. Making an inventory of your belongings will help you decide on the right amount of coverage for your personal property. Take pictures and make a video to document the unit and its condition.
Inquire about available discounts. Simply installing some safety devices may lower your monthly insurance bill. These may include a security system, smoke and carbon monoxide detectors, a sprinkler system, fire extinguishers, an up-to-date wiring system and deadbolt locks.
A homeowner’s insurance policy covers your personal home, your possessions, and people in your property. Generally, a standard policy protects:
- Physical structure
- Additional structures like sheds and pools
- Personal property
- Liability and legal responsibility for any injuries incurred on your property
- Additional living expenses if the property is damaged and you are unable to live in the property
When you purchase a property, you purchase a homeowner’s policy. However, before your first tenant arrives, change the policy to a Landlord’s Insurance Policy. Failure to make this change and notify your insurance provider that you’re renting the property could result in cancellation of your policy.
Remember, insurance doesn’t seem important until you need it. Make sure you’re properly covered and remember, insurance is a deductible business expense!
Read all our tips: Making Money with Rental Properties.