IN THIS BLOG:
- What insurance should landlords carry on their rental properties?
- Landlord's Policy and Umbrella Policy explained.
- What if I am renting my primary residence?
As a rental property owner, it is imperative you have proper insurance in place to protect you and your assets. There are two types of insurance you need as a landlord:
1. LANDLORD'S POLICY: Landlord’s Policies cover the landlord’s liability as well as the property itself. As an example, this insurance would cover missed rent payments in the case of an incident that makes the property uninhabitable. There are two important questions to ask your insurance provider in regards to Landlord's Policies:
- How long is loss of rent covered in this policy?
- Is there a lapse in coverage if the property sits vacant? If so, what is the timeframe? This is important to know as some policies terminate if the rental remains vacant for a certain period of time.
2. UMBRELLA POLICY: Umbrella Policies offer protection to investors in worst-case scenarios. For claims exceeding your landlord’s policy, the umbrella policy covers the excess dollar amount. We recommend a $2 million policy (bare minimum $500,000 policy). This additional coverage can be a saving grace if you ever find yourself in an emergency situation.
QUESTION: If I decide to rent my primary residence as a rental property, do I need a different insurance policy?
ANSWER: Yes. It’s a simple call to your insurance provider to convert your policy from a homeowners policy to a landlord’s policy. Your insurance will need to convert to policy you currently have to a landlord's policy.