When it comes to your rental management, Orlando property managers will always recommend that you carry the right insurance to safeguard your rental home. The right property managers can also be an asset when you're selecting coverage. If you're wondering whether you need coverage on your rental home, the answer is, "Absolutely!" However, not all types of insurance cover your investment property equally.
For the landlords out there wondering whether they simply need traditional home coverage or a specialty form of landlords insurance, this blog is for you! Here are some details to consider concerning your coverage needs—as well as those of your renters! We know that insurance coverage may not seem like an exciting topic, but we also know as the experts in rental management, Orlando landlords need to be considering this crucial topic!
Please note: This blog is not intended as legal counsel. When in doubt, speak with a competent attorney or your property management partner!
Traditional Home Insurance
Home insurance (also known as homeowners insurance) is designed to protect you and the family that lives in your home with you. Some people use their home policies for a rental property that only very occasionally is rented out to tenants. Still, in general, your home policy will have some gaps in its coverage if you are using the building as a rental property.
When considering the aspects of rental management, Orlando is a place where you want to make sure your coverage suits the context. A lack of the right coverage could spell trouble in the event of an actual disaster!
- It's difficult—or, often, impossible—to get homeowners insurance unless you live in the home itself.
- Many home insurance policies include personal property coverage—which you probably don't want unless you are storing lots of personal property on the premises while having renters.
- Liability insurance is connected to the individuals on the policy for homeowners insurance; it's structured differently in landlords insurance.
While not a rental property, if you simply rent out a room in your home, it's wise to think through whether you'll need special insurance through your home insurance policy. Talk to your insurance agent about what is and isn't covered in your policy and see what you can do to ensure you aren't left with an unknown—and substantial—potential liability.
How Landlord Insurance Differs
Landlord insurance is a "tailored" product that offers the kinds of coverage that are most helpful to you for protecting your real estate investment. Home insurance, by contrast, is more often used for overall coverage for your possessions and family. Landlord insurance will offer you the key protections you need for the property and the physical structure. In essence, you want to be able to make a claim against your landlord insurance if your tenant's negligence creates the potential for damages (which you'd have no way to stop, for instance).
Like home insurance, landlord insurance will protect your home from natural disasters like wind, hail, fire, and lightning. It also provides some liability coverage if your tenant is injured on-site, and you're deemed responsible.
That said, it's essential that you likewise inform your renters of the benefits of renters insurance (or include this as an element of your lease). Your renters cannot make a claim against your landlord insurance if a natural disaster or tragedy like a fire destroys their possessions. Combined structure and possessions coverage tends to be in a home insurance policy—not a landlord insurance policy. Don't be left without this key element of rental management, Orlando!
Why Renters Insurance Helps Cover All Bases
Renters insurance completes the circle of coverage that your rental home needs to remain profitable and secure. The goal of landlord insurance is to protect the landlord and their investment, meaning that anything damaged belonging to the renter isn't usually covered. Instead, renters take responsibility for their possessions and liability using renters insurance.
Policies usually are very reasonable, since assessed values for possessions in a rental aren't typically expensive, and the destruction of those articles is very unlikely. If tragedy does strike, your renters will be happy they paid a few extra dollars a month to insure their belongings.
Some landlords even require renters insurance as a component in their lease. Those who don't have this coverage are more liable to litigate against their landlords because they're in a desperate circumstance. It helps to work with an expert in rental management (Orlando, specifically) concerning how to approach renters insurance. That said, actively encouraging renters insurance as the complement to your comprehensive landlord insurance policy is a smart move.
Work With Your Property Manager!
An excellent property manager will have seen how various landlords handle their insurance—and they may even have insight into competitive rates and service offerings in your local area when it comes to insurance.
Don't aim for minimum coverage—and don't assume that your homeowners policy on your primary residence will somehow insure your rental property. Instead, recognize that insurance is a small expense compared to the peace of mind it brings—especially in cases where it is mandated by law!
A great property manager who specializes in rental management (Orlando based) can also assist you when you want to convince tenants to buy renters insurance to complete the protection of your property and their property. Presenting clear renters insurance options alongside the lease application can create a conducive environment for them to purchase the coverage they need—and give everyone involved some peace of mind.