But there are a lot of challenges as well, such rewards come with much risk because there is no way you can ever be certain that your tenants will take reasonable care of your properties. This is exactly why rental house insurance is so essential.
Not only should rental house insurance cover you against damage to the houses you own, but it should also cover you against any possible lawsuits which could arise if some of your tenants or members of the public were to get injured in the houses or on the property they rent from you. While you may not be 100% responsible, as the landlord you are always at risk from lawsuits, and there is always a chance you could be held liable.
There are many different hazards that can cause extensive damage to a property. Fire or storm damage, flooding or bursting of water pipes, vandalism or other damage can all make your rental property uninhabitable.The tenants will have to vacate the premises, and that in turn means a loss of earnings for you.
Not only do you lose the rental income, but you’ll also need to have any resultant damage repaired, and if you don’t have any rental house insurance, you yourself will have to cover those expenses. And in a worst case scenario, if the damage was caused through your fault or negligence, you could be held responsible for replacing any damaged property belonging to your tenants. As such, you need to make sure your insurance policy covers you against all such possibilities.
Making sure that your rental house insurance policy is up to date is an important part of owning rental property. Make sure you are carrying adequate coverage for property losses such as fire and windstorm. The premium that you pay for your insurance is a small loss that you take now in order to protect yourself from a large unexpected loss. Skimping to save a few dollars on your premium by not carrying enough coverage on your building or by not having a high enough liability insurance limit could really come back to bite you if you did have a serious loss.
You should also make sure your rental house insurance covers you against all the perils you might want to have. Certain coverags like theft, replacement cost coverage and others may not automatically be included. The insurance policy that most companies use as the basis for rental home insurance is not the same as a standard homeowners policy. Your homeowner’s policy includes many built in coverages that the policy for your rental property will not have. Be sure to carefully review your coverages with your agent, especially if this is your first time buying this coverage.
Once you know the coverages you need and are familiar with insuring rental property, you’ll find that there are a lot of options both from your local agents and online where you can shop for the best premium. Save money on your premium by shopping around when your policy comes up for renewal rather than by cutting or not having good coverage. It’s the best way to go.