Becoming a landlord requires a lot more paperwork than many people expect. Some days, it can seem like you're dealing with an endless stream of documents, legalese, and signing on the dotted line. But all of this paperwork and red tape is essential in order for you to be a responsible and well-protected landlord.
One thing you'll really want to sign up for? Rental property insurance. This is something that every landlord needs to have, for many different reasons.
It's not only necessary to have insurance but to have the correct type of insurance as well. If you're unsure of whether you're fully covered, this guide is for you. Read on to learn about the different types of property insurance available to you as a rental property owner.
Why You Need Rental Property Insurance
As a landlord, it's important to protect yourself and your properties from damage or harm. When you become a landlord, you take on a unique set of circumstances and responsibilities and each requires attention and protection.
Having other people living in a property that constitutes your livelihood presents a big risk. Failing to properly protect yourself is one of the biggest mistakes you as a landlord can make.
You need to make sure you cover all of your bases. Unfortunately, not all policies are created equal. So, what are the different types of coverage available, and which would suit your situation best?
Different Types of Rental Property Insurance
The first thing to note is that every insurance provider will have its own policies and level of cover. So it's important to speak with different vendors in order to find the best fit for you. In general, there are 4 different types of insurance you should be looking for.
Buildings insurance—also known as property damage insurance—deals with any damage done to your property. This could be anything from a fire to a faulty pipe that needs repairing. You'll need to check what each individual provider actually covers.
Contents insurance as pertaining to landlords refers to any movable items you yourself have added to your rental properties. These are things like kitchen appliances, washing machines, and light fittings. You should inform your tenants that they'll need to take out their own insurance if they want their personal belongings to be covered.
Tenant Liability Insurance
This insurance will cover any accidents or injuries your tenant has while on your property. It will also cover any guests they have that sustain injury. This will cover both the cost of any claims as well as any legal costs incurred.
Finally, we have rent guarantee insurance. As the name suggests, this covers your tenant's rent if they fall into arrears. This is often an extra, and something you'll need to request as an add-on from most insurance companies.
Get Covered With Rental Property Insurance
Adequate rental property insurance is something every landlord needs. Be sure to check your current policy, and be thorough when taking out any new ones.
If you're overwhelmed with the red tape of being a landlord, why not get help? At Income Property Investors, we're experts in San Diego property management. Get in touch today to see how we can be of assistance to you.