When it comes to keeping your rental property safe, you’ve taken numerous precautions. If you own real estate that you rent to others, it is still very important to protect your investment. Even if you believe you have the safest tenants renting your property, your house can still be at risk for unavoidable types of incidents and losses. The property home insurance can help to reduce the risks you face when an incident occurs.
How Can Property Insurance Protect Your Rental?
If you were to live in the house yourself, the house insurance policy you have will protect the building itself from many risks. The same is true for your rental. The building coverage will likely provide protection from risks such as:
Bursting, leaking or overflowing water or heating systems including pipes
Storm, wind, water, hail, and snow damage
Impact from trees, animals, aerials, or other objects hitting the property
Breakage of collapse of a radio or television system onto the house
If one of these incidents was to occur, the damage to your home can be extensive. The house insurance plan will help pay for the damages so you can repair it quickly.
What Additional Renter Coverage Offers
If you are not living in the property, you may wish to purchase an additional level of coverage. By purchasing an extension or clause for rental income, your house insurance plan will help you to recoup some of the losses associated with the loss of rent payments itself. Though each plan is different, a standard plan will offer loss of rent coverage if the property becomes uninhabitable as the result of a defined event (any of those that are listed above, or others as defined by your policy).
The insurance company will pay the insured up to 24 percent of the sum the property is insured at through the policy. The amount paid is determined based on how long the individuals must be vacated from the property for the necessary repairs from the damage as well as the annual rent of the building if it is unfurnished or the equivalent rental value.
In short, house insurance for your rental property should include coverage for the building repairs if they are necessary as well as insurance protection from loss of rent should your renters be unable to live there as a result of the cover loss.
If you did not have this type of insurance in place, not only would you have to make the repairs to your property on your own, but you would also lose out on the rent paid to you by your tenants for that time. Additionally, when you have high-quality house insurance, this means the work to make repairs will be done properly by a professional. This in itself can help ensure your renters can move back into a safe, clean, and secure home in no time. The investment in property insurance simply makes financial sense to most property owners no matter who is living in that house.