Do you need insurance for your investment property in Winston-Salem?
We can answer that immediately: yes, of course, you do.
What kind of insurance will best serve you and your investment property? We’re taking a look at what you need to completely cover your investment and protect you financially.
Landlord Insurance and Liability
When you buy a landlord insurance policy, you’re getting coverage for the physical property the same way your homeowner’s insurance covers the home you live in. The insurance will repair and replace anything that happens to the structure of your investment home. It covers your building and its systems, functions, and appliances.
Even more importantly, your insurance needs to provide liability protection.
You need this coverage to protect yourself if something happens and you’re sued. A tenant could fall down the stairs or a tenant’s guest could get injured in the driveway. You need to be prepared for any potential claim or legal action.
Property Investor Insurance and Loss of Rent Coverage
You also want to choose a policy that includes loss of rent coverage. It’s important to cover yourself in case you have to move your tenant out of the property. If your insurance policy does not include this, make sure you buy a separate rider to give yourself this coverage.
If something catastrophic happens and tenants need to move out of your property while it’s prepared, you may have to put them in a hotel or another property. If they can’t live in the property for an extended time, you’ll lose a lot of rental income in addition to paying out of pocket for costs like hotel bills.
Require Renter’s Insurance from your Tenants
Always require renter’s insurance from your Winston-Salem tenants. It protects you and it protects them.
Your insurance policy will cover your own belongings, but the tenant’s personal property is not covered. If there’s a fire or a flood and furniture and electronics are damaged, your tenant will not be able to file a claim with your insurance. They need their own policy.
Here’s why most tenants in Winston-Salem are willing to get a renter’s insurance policy:
- They want to protect what belongs to them. Most tenants have valuable possessions that mean a lot to them. They want to protect those things. They understand that to replace any furniture, clothing, or other personal belongings that could be damaged or lost in a covered incident, they’ll need renter’s insurance.
- Renter’s insurance is typically not expensive. It’s especially affordable if your tenants bundle the renter’s insurance with their automobile insurance.
Make this a requirement in your lease agreement, and ask for proof of insurance before a tenant moves in or renews the lease agreement.
Updating Your Landlord Insurance Policy
If you haven’t taken a look at your landlord policy in a few years, you might need an update. Your property is likely worth more now than it was five years ago, and the policy amounts need to reflect that. Talk to your insurance agent, and if you don’t have one, we’d be happy to make a referral.
Additional protections are always available when you’re buying insurance for your rental property, and you should consider them carefully. We provide property management services in Winston-Salem, and we’d be happy to talk more with you about what you need to be properly insured. Please contact us at Capstone Realty Consultants.