Reasons Why You Need Rental Property Insurance
If you are looking for a suitable investment idea in this era, you should consider the real estate sector. Rental properties are high on demand, and you can enjoy the demand for an unforeseeable future as long as you manage your property correctly. In most cases, landlords hire a property manager to make their assets profitable but forget the need for rental property insurance. Every rental property owner should have rental property insurance coverage as a means of avoiding the possible financial risks associated with leasing a property. A rental property insurance policy is meant to cover for possible damages caused by tenants, loss of rental income, and liability costs. Therefore, you should find a good insurance agent that will offer the best rental property insurance coverage that will protect your investment. With the right policy, you will forget about the financial risks associated with tenants living in your property. Read on to learn some of the important reasons for having rental property insurance.
As a rental property owner, you will start by deciding the rental property insurance coverage that you need. Most of the insurance companies offer rental property insurance coverage in there different tiers namely; DP-1, DP-2, and DP-3. DP-1 is the lowest level of rental property insurance coverage that only protects the property against basic risks such as fire and vandalism. DP-2 insurance level extends beyond the basics to tenant damage, windstorm, and hail while DP-3 covers for all the instances. Hence, for full protection, you should consider getting a DP-3 insurance tier. In case you have partial insurance coverage, you should not waste money on DP-3 insurance.
As mentioned earlier, rental property insurance coverage is meant to protect the landlord from liability costs. Renting a property means putting your property in the hands of a tenant. In case a tenant or the visitor sustain injuries while on your property, you will be liable for the financial damages such as medical costs. Risks cannot be fully eliminated in a rental property. If this happens, the insurance company will take care of the possible costs. Also, note that rental property insurance covers for the legal counsel.
The goal of having a rental property is getting revenues but this depends on the occupancy. loss of rental income is a common issue that most landlords face when the units become uninhabitable. The best way to protect yourself from the risk of rental loss is by having rental property insurance coverage.