Something I hear a lot from landlords is: what kind of insurance do I need, and am I properly covered?These are good questions. One of the founders of our company came from an insurance background, and we set this company up to mitigate risk and do things the right way, especially with insurance. So, we know what we’re talking about when it comes to insurance and investment property.
Do I Need Landlord Insurance?
If you’re occupying your home right now, you have a homeowner policy in place, which covers you as an owner and an occupant. This policy covers the sticks and the bricks and your personal property. That includes any belongings like tools, appliances, and other personal things that would be covered in a casualty loss. You’ll need to tell your insurance company that you’re converting your home to a rental, and you need proper insurance.
Landlord Insurance Considerations
Get a policy that allows for the home to be vacant. Sometimes, an insurance company will drop you if you have a vacancy for 30 days. Make sure it’s a policy that’s specific for landlords and permits a vacancy period. Your policy should not include any personal property coverage. None of your property should be in the rental. The coverage should be for the sticks and the bricks, only.
Liability and Landlord Insurance
Liability does become an issue with rentals. Your insurance policy should have a liability rider. Often it says personal liability on your declarations page or general liability. You want to make sure your insurance company will add your property management company as an additional insured or co-insured. Most companies will do this, but a few will not. You need your property management company added as an additional insured or a co-insured on that liability rider. There are lots of reasons for that, which we’d be happy to discuss with you in person or in a later blog.
The insurance basics break down to this: You need to convert your homeowner policy to a landlord policy. It must allow for vacancies. It needs to cover your property management company.
These are the things you need in an insurance policy. If you have any questions about insurance or you need help with Austin property management, please don’t hesitate to contact us at Austin Landmark Property Services.