If you are a property owner who is interested in renting your home out, you should get to know your insurance policy very well. After all, it is these documents that serve to protect your property — as well as any other assets you might have — in the event that a catastrophe occurs.
Smart Risk Management Strategies
In the name of good and sound risk management, you shouldn’t rely on a typical homeowner’s policy to protect you. Instead you need to purchase landlord’s insurance. Otherwise your insurance company might decline to pay your claim if they learn that your home was being rented out.
What is Umbrella Insurance?
Umbrella insurance might seem like a redundant waste of time and money. However, there are some events that occur that can easily overwhelm the policy limits of most landlord insurance policies. Without umbrella insurance, it is possible that if a tenant sues you, the courts will go after your assets once the insurance maximum limit is surpassed.
Instances When Umbrella Insurance Can Help
While you need a good basic policy, in some cases, it might not be enough. Umbrella insurance helps make up the shortfall by providing you with extra liability coverage. There are two typical scenarios when umbrella insurance could be worth purchasing.
- Base Policy Limits
Your basic policy likely contains some typical limits. The important thing to remember is that the insurance company bases these limits not for catastrophes, but for typical occurrences. This means that the worst case scenario might not be covered under your base policy.
- Base Policy Coverage is Lacking
There could be some instances when your base policy doesn’t cover everything on your property. Perhaps you made upgrades to attract better tenants but your base policy doesn’t cover the full cost of them. Umbrella liability insurance can help you fill in any gaps that might be left by your basic policy.
Need more advice about which type of insurance is right for your property? Contact Real Property Management Las Vegas for expert advice.