Investment property insurance is essential for those who are looking to make a profit from real estate by investing in multiple properties. There are, however, a few tips that can help you find the right policy for your investment portfolio. Of course, you have to decide what type of coverage you are looking for. There are two basic types: property damage and liability. There are also additional policies that can be purchased to protect against such things as tenants, asbestos, and vandalism.
Property damage coverage protects your investment property against a variety of different damages. The most common is liability coverage. In order to get the right amount of protection, it is important to understand the basics of liability coverage. First, just consider the typical causes of damage to rental properties. The main types are property damage (including fire, smoke, wind, hail, or vandalism), theft, and malicious mischief. In most cases, you can also purchase additional tenant insurance to add to your liability coverage for the rental portion of your portfolio.
Liability coverage comes in two varieties: bodily injury liability and property damage liability. Each type covers a different way in which you can be held responsible for injuries that occur on your rental properties. Bodily injury liability covers things like a slip and fall, dog bite, or even a hit and run. Property damage liability is a little more specialized, but is often the method through which landlords protect themselves.
There are many ways that an investment property insurance policy can protect you from these events. For instance, many policies will include accidental death coverage, which will cover the cost of funeral expenses if you or one of your rental tenants is killed. There are also limits to coverage in this area, so you should check with your policy very carefully. You can also have medical coverage included in your rental property policies. There are many factors that you should consider when it comes to choosing the right protection for your investment properties.
You will want to choose investment property insurance that offers you enough coverage to cover your personal property and the physical properties owned by the business. If you only insure your personal belongings, you may not be able to replace those items in the event of a disaster. If you own more than one rental properties, you may want to increase your liability coverage so that you have the coverage necessary to protect your investment properties.
When you are looking for rental property insurance, consider whether or not you will need to carry collision coverage on your buildings. Collision coverage is a way to protect your investment properties against damages due to natural disasters, such as wind, hail, or vandalism. This coverage does not pay you to repair or replace your rental properties. Rather, it pays you to fix or replace the damaged portion of the building.
When you are talking to your investment property insurance agent about liability coverage, ask him or her about the extra coverage that some landlords need to have. Many landlords carry flood insurance to protect rental properties from water damage. For real estate investors who are in need of this coverage, they should contact their landlords and ask them about the amount of coverage that they carry. If you are unsure about whether you need this coverage on your rental properties, you should request flood coverage as a written policy that you can add to your policy.
As you can see, there are many options available when it comes to protecting your investment properties. When choosing an investment property insurance policy, you may want to look for a policy that offers you a combination of investment property insurance and rental coverage. This type of policy is the most effective at protecting your rental income. You can save money on insurance premiums by choosing to carry more than one kind of coverage. With the right policy in place, you and your landlord can both feel safe in the knowledge that your investment properties are protected against loss due to fire, smoke, vandalism, theft, and other disasters.