5 Tips When Purchasing Landlord Building Insurance

What is Landlord Insurance?

Landlord building insurance provides building and liability coverage to protect landlords from any damages or injuries that happen related to the property. Landlord insurance policies typically do not provide coverage for personal contents in the property, unless the landlord has personally furnished the home and is wanting coverage for those specific items.

5 Tips for Every Landlord When Purchasing Landlord Insurance

  1. Sufficient Landlord Building Insurance. What is landlord building insurance? Building coverage provides you with protection to replace or repair your rental property after an insurable loss like a fire. The one problem we see way too often when bringing on new clients is that they are extremely underinsured. The amount of building coverage their current policy provides them with would simply not be enough to rebuild their rental property in the event it was destroyed. That’s where our job comes into play. We properly educate clients in making sure they have a sufficient amount of coverage to replace their rental property in the event of a major loss.

          2.Coverage For Loss of Rent. You need to make sure your agent has included coverage for loss of rent after an insurable         loss. If there is a fire and your investment property is no longer inhabitable the insurance company would now cover your lost rental income while the home is under construction. We always recommend selecting a high enough coverage limit to provide yourself with at least 18 months of loss of rent. Loss of rent is extremely important for a landlord to maintain a positive cash flow when a rental property is uninhabitable after an insurable loss. Loss of rent can be added onto a business insurance policy as well.

 

         3.Personal Liability Coverage. Your liability coverage protects you against lawsuits for any bodily injury or property damage that you  are found legally responsible for. This coverage includes legal fees and any court awards up to your policy limits.  If you have a pool, a trampoline, dogs, etc. you could be at risk for a major liability claim. We always recommend our clients carry at least $500,000 in personal liability coverage. If your tenant is injured on your property and tries to find you as being negligent for the loss, you need to make sure you have enough liability coverage in place. We also recommend our landlords carry an umbrella policy.

An umbrella policy protects you when the liability coverage on your landlord insurance is exhausted from a major claim. If your tenant suffers injuries that will now sideline them from being able to work for months, or years, they can sue you for lost income, medical bills, and pain and suffering. These costs can add up quickly.

 

Without an umbrella policy you may be left having to pay for some of these expenses out of pocket. How do you know if you are carrying enough umbrella insurance? Depending on what you want to protect we like to recommend carrying enough liability insurance to cover your net assets. Not only will an umbrella help you sleep at night but they also very affordable. Sometimes they can also provide you with a discount on your auto and home insurance.

 

          4. Require Tenants to Carry Renters Insurance.

California landlords are allowed to require tenants to obtain renters insurance during the term of their lease. This will help transfer some liability from you to the tenant, in the event an injury occurs while they are occupying your rental property. Also, in the event your tenant causes any property damage, like a fire, they have insurance in place to cover the loss.

 

5. Find an Independent Agent. Many customers don’t fully understand how important this is. At the end of the day, many things separate one agent from another. The ability to proactively service their policyholders, their knowledge of the insurance industry, products, and different situations that may present themselves to their clients. An independent agent gives you access to a wide range of companies, different product types, claims assistance, can make the process of switching from one carrier to another extremely easy, and you are also supporting a local business. Landlord building insurance can be very complicated and an independent agent is going to give you the best chance to make sure you have all your bases covered.

Companies We Work With

  • Safeco 
  • Progressive landlord insurance
  • Travelers
  • Hartford
  • Nationwide
  • Hippo
  • Liberty Mutual landlord insurance
  • Mercury
  • Stillwater
  • and many more….

At Don Williams & Associates, we have been helping landlords protect their rental properties for almost 60 years. Whether it be a commercial property that fits into Hartford or Liberty Mutuals appetite or a single family dwelling in the Progressive landlord insurance program, we are here to help.

 

Reach out to one of our insurance experts today at 408-402-3646 or fill out a form here to see how we can help protect your rental property!

 

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