If you own property rentals, your top priority should be to obtain landlord insurance. This will protect your investment and reducing the chances of not being able to replace your property should an occurrence happen that completely destroys your property or properties.
Compensation of Loss
Generally, the landlord insurance should compensate a loss in one or two ways. The first is by compensating you with the money to replace the property itself. The other is compensation by replacing it with a property of equal value. The latter is very rare, as it is often too difficult to find another property that is actually similar in value to your own. However, you do want to be sure you understand the compensation aspect of the coverage before you sign up.
There will be many factors that will determine your premiums on landlord insurance. The first thing they will consider is the actual property and how well it has been maintained by you. They will also consider the occupancy rate, as a property that is empty is at much higher risk for an occurrence of damage to occur from break-ins and crime.
If your investment properties make up the largest portion of your income, you will also want to be sure to include compensation for lost rent on your policy. However, you do want to completely understand everything that is covered, as your policy may not cover the losses of your tenants. For this reason, it may be necessary to require your tenants to obtain their own tenant’s insurance when renting from you.
Landlord insurance must be a top priority for anyone who invests in property. A fire could completely wipe out your investments and leave you with nothing. Therefore, be very diligent when you are obtaining quotes from a variety of companies and be sure that you read all the fine print to make sure you understand exactly what is covered and how you would be compensated.