Real estate is an ever-growing means to providing additional income for your family. Several people are beginning to own property as rental income or a means to be able to move while keeping their primary home for a later time. If you find yourself in this situation, keep reading to gain an important suggestion from an insurance stand point that will help protect you and your tenants.
The Landlord needs a rental dwelling policy
The property you own will need to have an insurance policy. We often call this policy a rental dwelling or a fire policy. The policy mimics a homeowner’s policy in the elements it protects against and the dwelling coverage. There is coverage for the main structure, additional buildings on the property, and some liability protection. The declarations page between the two looks very similar. The most relevent difference is the lack of personal property coverage. Since the policy is contracted between the company and the landlord, the tenant’s property is not covered.
What is a Renter’s policy
As a landlord, you should require your tenants to purchase a renter’s policy. Renter’s policies protect the personal property of the tenant should a loss occur against any covered reason for loss. This includes water damage, fire damage, and theft to name a few. The tenant can choose the proper amount of personal property protection based on how much they own for themselves. This amount will cover their clothes, furniture, electronics, kitchen items, and more.
The policy will also have liability protection included. Should someone be injured on the property, the tenant will have their own protection for the incident with a renter’s policy. Medical payments is also an included coverage as well. And loss of use providing payment assistance for them to stay at another location while the property is being repaired if a claim occurs that requires the tenant move out for a short period during repairs.
Over all, there is necessary and wise protection for both the landlord and tenant if a renter’s policy is actively inforce for the entire lease agreement.