3 Questions To Ask About Insurance For A Rental Property
Do you have a property that you wish to rent out? Is it your first time being a landlord? As a landlord, one of your biggest responsibilities will be to maintain the property. As is the case in any home, sometimes those maintenance and repair costs can be extremely high. That can be especially true if the damage was caused by a fire or severe weather. Having the right insurance policy can protect you from serious financial loss. However, it's important that you get the best policy for your property and your budget. Here are three questions to ask to make sure you get the right policy:
What hazards does it cover? Landlord insurance usually comes in a few different levels of coverage. The least expensive form of coverage will usually only cover extreme types of damage, like fire and natural disasters. As you increase your coverage level, you also increase your protection against various types of risks, such as vandalism, water damage, and smoke damage. Make sure you fully understand what is and is not covered under your policy. Also do a cost-benefit analysis to determine whether that extra protection is really worth the additional premium.
Does it cover appliance replacement? It's possible that your margins on the property could be pretty slim. If you need a major repair, like a furnace or air conditioner replacement, that expense could blow a hole right through your profits. Many insurance companies will offer add-on features to landlord insurance that cover these major replacements. That way, if you do need a new furnace or water heater, you don't have to pay for the repair out of pocket. Talk to your insurance agent to see if this additional protection is available.
Does it offer coverage for loss of rent? What happens if a fire or natural disaster makes your property unlivable? What if your tenant has to move out while the repairs are taking place? Often, the biggest cost with a rental property isn't the actual cost of the repair, but rather the loss of rent. Many insurers will offer additional coverage to protect you from this expense. If your tenant is forced to move out because of damage that is covered under the policy, the insurer will reimburse you for the lost rent.
You should know, though, that this doesn't cover lost rent that is unrelated to damage. You can't get reimbursed just because you're between tenants or because a tenant chose to break his or her lease. Still, though, you may find that this is a helpful feature.
For more information, talk to an insurance agent, like as those at Arkansas First Choice Insurance. He or she can recommend the rental property insurance that's best for you.