When it comes to real estate, all insurance policies aren’t created equal.
On your primary home, a basic homeowners insurance policy may suffice. But on rental properties, that’s not enough — financially or legally.
Do you have rental properties in your investment portfolio? This rundown of four types of insurance policies is a good place to start if you want to protect yourself and your property.
Landlord or Rental Property Insurance
There are a couple of different names for these policies, which protect you if your property is damaged due to certain weather events. It should also include liability coverage in case your tenant or their guest is injured on the property.
Rent Guarantee Insurance
If your tenant stops paying rent, the insurance company can step in and compensate you for those months of lost income.
Loss of Income Insurance
While this sounds similar to rent guarantee insurance, loss of income insurance protects you if your property becomes uninhabitable (and you can no longer earn income from it). If that happens, you’ll get paid for some or all of your lost income during that period.
Umbrella insurance is a popular policy that provides extra protection, filling in the gaps where other policies might fall short. It usually offers additional liability and damage coverage on top of your existing insurance.
Depending on where the property is located, you might also want flood, earthquake or fire insurance, and you should require tenants to have renters’ and pet policies, too. When doing renovations or construction on the property, builder’s risk insurance might also be necessary.
Do you need help finding your next real estate investment? Reach out today.