Landlord insurance can be a bit confusing if you are new to it and even more confusing if you have turned it into an investment and now have several properties to insure. Here are some key points to be aware of as you are obtaining coverage for your properties.
- Dwelling Coverage: You will need to decide if you should elect actual cash value or replacement cost coverage for the structure itself. ACV coverage is less expensive, but if a claim happens they will give you a depreciated amount to fix or replace issues with the property whereas, replacement cost gives you the full amount. One of the key things to be aware of is if there is a partial loss or part of the building needs to be fixed, ACV will give you a depreciated amount to fix it. Replacement cost is definitely the better coverage, but for investors who have 50 or more properties ACV can make sense with the money saved at that quantity.
- Contents Coverage: Many people don’t think about this, but when covering the property you always want to have at least $10,000 of personal property coverage to cover any appliances. All appliances are covered under personal property. When a 4 unit home is owned, this is especially important to make sure you have enough coverage for each unit.
- Loss of Rents: This coverage is crucial. Very inexpensive, this kicks in if a claim happens and the tenants have to move out for the time it is being repaired or rebuilt. The policy will reimburse you for the rent that was lost.
- Inspections: For people who have several or many properties must be aware most carriers do inspections, and most times, the carrier comes back with fixes such as putting up a railing, paint, fix electrical etc. If you can find a carrier that does not do inspections but trusts the client and the agent, that is the best. As this can be a real pain property owners.
If you have any questions or would like a quote on landlord insurance please email me at firstname.lastname@example.org