For some property owners, the cost of landlord insurance may seem burdensome. Many people might even think that they are overpaying for even a basic landlord insurance policy. However, if you are a rental property investor with only basic coverage, you may want more insurance to protect yourself and your property from catastrophe.
For landlords in Littlerock, it is imperative to obtain insurance that covers more than just your rental house. You may feel safe knowing that your investment is protected with the right insurance for your situation if you have comprehensive coverage for lost rent, full responsibility, and unexpected special assessments.
Incidents may require significant repairs
Several investors understand the value of getting insurance coverage to protect their investment in the case of a substantial loss. Storm damage, fire, and other events can result in extensive repairs and make the property uninhabitable. With a basic landlord insurance policy, you are helpless to defend yourself against the loss of rent. This is where fair rental income protection comes into effect.
Protect your cash flow
Often referred to as fair rental value coverage, this type of insurance may help replace lost rent payments if your rental property is temporarily uninhabitable following a covered claim. Some landlord insurance policies include this type of coverage, but many do not. If yours does not, and lost rent is a concern for you, it is important to investigate adding fair rental income protection to your base policy. This additional coverage can provide a financial safety net, reassuring you that your income is protected even in unforeseen circumstances.
Additional liability coverage
A comprehensive landlord insurance policy will protect you from the cost of property damage and some forms of commitments. Several landlord insurance policies cover medical or legal fees if a tenant or guest is injured due to the property’s condition. Some property investors, though, need greater coverage due to other possible risks. In some circumstances, additional liability coverage may be the ideal option. For instance, if a tenant experiences a break-in while renting one of your properties or commits an illegal act and you do not take immediate action to address the issue, you may be responsible for sums greater than those covered by a basic landlord policy.
Special Assessment Coverage
In addition to lost rent and liability, you need to explore special assessment coverage. A special assessment is a fee collected by an owner’s association on community association property owners. For a number of reasons, such as building or neighborhood development projects or necessary repairs, these special assessments can be added to current association fees. Property owners can purchase special assessment insurance, also known as title insurance, to steer clear the unwelcome surprise of a large special assessment. This insurance protects your property from special assessments that were not covered in the original purchase documents. If your rental properties are liable for homeowner’s association dues, this is one type of insurance that property investors should seriously consider.
Talk to a professional
To protect all your assets, it is necessary to consult with an insurance expert to obtain the insurance you need. In addition, as your investment portfolio changes, so should your insurance coverage. It is not just important but empowering to review your insurance coverage annually and make the adjustments necessary to keep you and your Littlerock rental properties fully protected. This preventive strategy guarantees that you are always in control of your insurance needs.
Property owners in Littlerock can get help from Real Property Management Traditions in identifying the insurance products and coverage they require. We can match you with professionals offering quality insurance policies at the most competitive rates. Having industry experts on your side will give you peace of mind that you have the correct landlord insurance for a long and profitable rental property investing career. Contact us online or at 661-266-1400 for more information.
Originally Published on September 20, 2019
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