How much will your home rent for?
When you’re renting out a home in Manhattan Beach, you need to routinely review and update your insurance policy. It’s important to keep yourself and your asset protected. Even with good property management and exceptional systems in place, you never know what’s going to happen. Talk to your insurance agent about any new insurance laws or policies. Expert advice can help you reduce your liability and your potential for financial loss.
Whether you’re shopping for a new insurance policy for your rental properties or you’re thinking about renewing, there are a few specific things you need to consider.
Landlord Insurance vs. Homeowners Insurance
If you were living in your property before renting it out to tenants, you’ll need to change your insurance policy. A homeowner’s insurance policy is what you buy when you’re occupying your property. It covers the physical structure of the home as well as all of your personal possessions. A landlord’s policy is a little different. It covers your property and the cost to rebuild or replace your home, but it does not cover any of the tenant’s possessions. It’s very important that you convert your policy when you begin to rent out your home, otherwise potential claims will not be covered or paid.
Increase Your Liability Coverage
As a landlord, you open yourself up to a lot of liability and potential risk. It’s important that you buy as much liability coverage as possible. As a landlord, you’re likely to be the target of lawsuits and claims. Protect yourself by insuring your home against any liability. If your tenant or a tenant’s guest is injured at your home and they file a claim or a lawsuit, you’ll be covered. Most insurance policies offer liability coverage of between $300,000 and $500,000. You can also buy a policy for up to $1 million in liability coverage, and this is something to think about, especially if you have a lot of assets.
Check for Loss of Rent Coverage
One consideration that many landlords don’t think about is loss of rent. If something catastrophic happens at your property and your tenants need to move out, they won’t be paying you rent. But, your mortgage will still need to be paid. When you have loss of rent coverage included in your insurance policy, you will be reimbursed for the rent you lose when tenants need to move out.
It’s also a good idea to require your tenants to buy renter’s insurance. It’s quite inexpensive, and it covers your tenants’ possessions as well as their own liability risk. Let your tenants know what the benefits are to renter’s insurance, and include the requirement in your lease so you can hold the tenants accountable to maintaining coverage throughout the tenancy.
Most property management companies will expect to be named as an additional insured on your policy. This is standard industry practice, and your insurance company should do it without an additional cost. If you have any questions about insurance requirements in Manhattan Beach, please contact us at South Bay Property Management Pros.