Landlord Mistake #8: Insufficient Insurance

Today we’re on Landlord Mistake #8, Insufficient Insurance.

Pro Property Management is not an insurance company – we don’t sell it and we’re not professional insurance advisors. However, we have seen landlords make this mistake more than we’d like, so I’m sharing our perspective with you. Having insufficient insurance can ruin your rental business. Period.

Investment property insurance is different from your typical homeowner’s policy. It’s more complex and you may need multiple policies to fully protect your finances. You need to discuss your situation with a licensed insurance provider to make sure your coverage matches your needs.

Here are a few topics for that conversation:

Structural coverage. Make sure the coverage on the structure will cover major reconstruction costs if those become necessary. If your standard policy’s limits are too low, you may need to purchase additional coverage.

Water coverage. Some policies do not include coverage for water damage from leaky pipes, broken water heaters, or other plumbing issues. Make sure yours does. These kinds of issues are common.

Loss of rent coverage. When a tenant is displaced for repairs, you will lose rental income. Ask your agent what coverage is needed to fill in the vacancy gap.

Liability coverage. This covers claims that arise from injury or damage that takes place on your property (for example, a trip and fall accident).

Specific risk coverage. Most structural policies don’t cover major disasters, like earthquake, flood, hurricanes, etc. If your property is in a high-risk area, you need to make sure you are covered.

Adding your property manager as an additional insured.

Adding the property manager you hire to your policy protects them for issues arising with the home, which is not covered through their business insurance policies. Ask your insurance agent about the cost and benefits of this action.

Pro Property Management specializes in managing residential rental property. We are not an insurance company. We can help you understand the kinds of events you may want insurance to cover, however, you really need to talk with a trained insurance professional to discuss the nitty-gritty. If you’d like us to refer you to a trustworthy local agent, let us know. We’re happy to point you in the right direction!

We look forward to talking with you about your needs and our services soon!