When renting out your property to prospective tenants, there are a few basics you must know. As the owner of a property, you are liable for all issues that arise, so having quality property insurance takes on greater importance. Without property insurance, you may be forced to pay damages related to weather, vandalism and a wide variety of other problems that arise.
Those who rent out their property have to deal with the same level of risk as those who own their own home. There are two different insurance policies available, the HO-4 and the HO-6, with the HO-6 aimed towards the needs and concerns of property owners. The HO-6 policy protects owners and provides coverage for many different maladies.
Weather related issues are covered, include damage that occurs due to wind, snow, rain, lightning, hail, volcanoes and sleet. However, a different policy may need to be purchased if you live in an area that is susceptible to earthquakes and floods, as they are not included in a HO-6 policy. Wind damage policies may also be sold separately if the property is located in a coastal region that is more susceptible to wind related issues.
Damage from riots, explosions, vehicles, airplanes, vandalism, theft and smoke are also included in the HO-6, giving those who rent and own their own property valuable piece of mind.
Even more importantly, the HO-6 provides coverage for a bevy of problems that can come about due to poorly installed plumbing or electrical systems. Heating and air conditioning damages are paid for, as well as any damages related to accidental water or steam discharge.
You may also require coverage for any other pieces of property within the area that you are renting. If you have any sheds or garages on the premises, these will also necessitate the purchase of coverage.
If you are allowing tenants the usage of any personal items or are leaving some of your own items on the property, it is important to have these included in any property insurance agreement.
The HO-6 may not apply to your specific situation, so landlords can also choose from liability, fair rental and inflation protection packages. A liability policy covers property owners’ costs if a claim is made against them for damages to the property that are considered to be accidental.
A fair rental policy reimburses owners who are unable to rent out their investment property due to issues covered by their policy. The insurance will pay for any lost rental income caused by these problems. Inflation protection gives owners help in paying for property repairs.
Be sure to shop around and look at a number of different policies before deciding which one is best for you. It is vital to tailor the policy you choose to the specific needs of your property. No landlord wants to be left holding the bag for problems that occur, whether they are natural or man made. Property insurance gives you the buffer you need from these issues, to ensure peace of mind.