Purchasing property to rent can be a great way to have more income, but it is important to be prepared for potential issues that could arise. Purchasing the right home insurance policy will make a difference, as it’ll be easier to handle any type of emergency. When shopping for rental home insurance, there are a few things to look for to make sure the policy covers as much as possible.
Make Sure the Policy Covers Rentals
A landlord will need a home insurance policy to cover potential damage to the home and other issues, but they can’t purchase any home insurance policy. Most policies are intended for homeowners who live in the home, so they don’t offer the coverage a landlord will need. Instead, it’s necessary to look into insurance policies specifically designed for rental properties.
Inquire About Squatters Coverage
Landlords should be aware of the potential for squatters if the property is vacant for a period of time or if tenants refuse to pay rent or move out of the property. Many states have squatter’s rights, so it will be crucial to navigate the situation carefully to have them removed and minimize potential damages. Having this included in the insurance policy means there is help available if anyone is squatting on the property.
Consider Adding Loss of Income
When the home is damaged or there is an issue that prevents the home from being rented for a period of time, the landlord will not have any income from it. A policy that includes loss of income can help cover the loss during this period, so the landlord isn’t going to completely be without an income before the property can be rented again.
Look Into Alternative Accommodation Coverage
If the home is no longer habitable, the landlord may be responsible for providing alternative accommodations for renters until they can move back into the home or the lease has ended. With the rising cost of extended-stay hotels, it is crucial for landlords to see if this can be included in the rental home insurance coverage. When it’s included, it will cover the tenant’s accommodations until the end of the lease or the repairs are completed.
Check for Liability Coverage
Liability coverage is crucial for landlords, as it protects them from being sued for any injuries that may occur due to their negligence. If, for instance, something on the property breaks and isn’t fixed quickly, if a tenant or guest is injured, the landlord could be held liable. The insurance policy can help cover medical and related costs so the landlord doesn’t pay them out of pocket.
Ask About Accidental Damage Coverage
If the home is damaged in any way, it is important to have coverage to help pay for the repairs. This can help with repairing damage done by tenants, storm damage, squatters, and more. Read the details of this part of the policy to understand what is and isn’t covered by it.
As a landlord, it is crucial to find the right insurance coverage for all rental properties. Whether you’re looking for new options or you are buying rental home insurance for the first time, take the time to check the coverage to see what it includes and how it can help if there’s an emergency.