With various types of property insurance on offer today, it is hard to determine what works best for you.
Here are some of the must-have insurance policies that every property owner must have:
1. Terrorism Insurance
This one is only applicable if in the event of terror, your property is vandalized or damaged.
2. Loss of income insurance
This cover comes in handy for property owners who rent out their investment. This is a dependent policy as it is usually included in other policies such as fire insurance and hazard policy at an extra cost.
3. Liability insurance
This is ideal for not only the physical building but also your actual business.
4. Flood insurance
This one is advised for you if you leave in areas that are prone to floods, storms and hurricanes. It may cost you a lot if the risk is high, but then it will be worth it as you will be reimbursed should the listed risks occur.
This policy is a sigh of relief to property owners who had to deal with insurers who only offered typical policies such as fire insurance policy, which only covers fire related damages.
Note that this policy only covers damages caused by natural floods and not leaking or burst pipes in your property.
5. Umbrella Insurance Policy
While this one is not mandatory, it usually provides extra cushioning as far as liability protection goes.
When Property Insurance for Investors comes in handy
If you have regular vacancies in your rental units, your home cover will not provide sufficient coverage as compared to when you are having long-term renters. If you share the same compound with your tenants, you can go for a homeowner’s cover that offers coverage for units rented to others.
If you do not share a compound with your tenants, you require a separate policy. Note that the occasional rental of another property requires a different policy, depending on your insurer. The most important thing to do is to read the fine print and understand the contract. You can ask if your insurer allows rentals on a short-term basis and if they allow it, you can start with a four-week mark.
As a property investor, you should always be on the lookout as far as policies are concerned. While most of them promise a successful conclusion, you should be very keen and read every detail in the terms and conditions.
Your initial homeowners’ policy might land you in big trouble as it might not cover all the claims as promised. If you rent out your property, please look for insurance cover that is listed under that category. Most important, consider how many times the insurance company has paid out claims. If they have never paid even one, it may mean they are not good or they have not been long in the business.
It is your duty to furnish your insurer with all the details regarding your renting status; whether you are renting it out for a week, a month or a year.
If you are starting out on property investment, you might need to approach the field with much caution, especially as far as property insurance goes. Aggressive insurers tend to target rookies who have no idea on how to go about handling insurance issues of their property.
Comments