Entering into the realm of rental housing is an exciting event that offers the satisfaction of a steady stream of income. What many property owners don’t fully realize is that in addition to natural acts of destruction from Mother Nature, their properties are also prone to damage from tenants. It’s essential that property owners realize that their homeowner’s policy likely doesn’t provide them with the protective coverage they need to address these possibilities.
Types of Insurance Policies Property Owners Should Consider
Loss of Income Insurance
While some other types of insurance policies offer protection from a loss of income, a separate policy or rider can also be added if it does not. In certain circumstances, loss of income insurance can help a property owner recover revenue that is lost. Some possible instances where coverage might be provided include building damage that forces a vacancy, damage from a tornado or a business disruption that requires the property to be vacated.
While a typical policy that insures a property provides some level of coverage, a rental property is subjected to other types of liability that might not be covered. Landlord insurance delivers further protection in a variety of circumstances including injury to a tenant and personal damage as well as other types of general loss.
The National Fire Protection Association reported $14.3 billion in damages caused by more than 1.3 billion fires in 2015. Fire insurance is designed to provide funds to rebuild or repair a building that is damaged or completely destroyed by fire. In most cases, damage caused by the spread of the fire to other dwellings is also covered. While tenants are often the source of fires starting, they are not at fault in all instances.
Other possible additional insurance policies include vacant property insurance, workman’s comp insurance and more. As a property owner, checking with your property manager to learn their recommendations as professionals in the industry goes a long way in ensuring that you have the protection you need.