Property Insurance is one of the major purchases a homeowner will make in his lifetime. Rental Property Insurance is usually covers any property you may rent out to tenants and any fixtures or appliances that you provided to tenants on rent. It can also cover damage caused due to perils like fire, hail, and wind. If renting out property is damaged due to storm, tenants normally have to pay for the repairs. So if you are renting out property, it is essential to get a Property Insurance to ensure the safety of your tenants.
Many home-sharing companies offer property damage rental insurance to the homeowner. It helps a homeowner if there is a fire or any other damage at his home due to a natural disaster or vandalism. If a homeowner has insured his home and is renting out his property to others, the homeowner gets compensation from the insurance provider in case the tenant or members of the household cause damage to the property.
The cost of damages to the rental property depends on several factors. These factors include the actual replacement value of the rental home, any fixtures and appliances damaged during the fire and theft, and any liability charges imposed by the landlord and the tenant.
- One of the main advantages of getting a Rental Property Insurance is that homeowners can insure their property against damage or destruction caused by a tenant or guest. In many cases, when a landlord has to cancel the policy of his home insurance provider, he would lose a lot of money. By carrying a rental property insurance, a homeowner is able to protect his rental income of the new tenants. In many states, home owners have to pay a portion of their rental income to the landlord, which is deductible from their rental income taxes.
- A property owner needs to consider a few important factors before taking out rental property insurance. First, the damage or destruction caused to the rented house or apartment should be included in the coverage. In addition, the amount of the loss should also be specified. Usually, the landlord pays the deductible.
- The third factor to consider is to know whether the tenant or members of the household have covered themselves with liability or sickness. This is important because in the event that a member of the household becomes sick, the family’s health insurance or the insurance of the landlord may come into play. What is covered by the liability policy is the medical expenses and other costs incurred by the tenant due to sickness?
- The fourth and last point to consider is to know if the Rental Property Insurance will cover personal injury or damages done to the person who is renting the house or apartment. Although, it is usually common sense, some tenants do not understand how the policy will be interpreted in this regard. A common example is when the tenant slips and falls on the stairs and suffers an injury. Obviously, the landlord will not cover personal injury damages. However, if the stairs were made slippery as a result of poorly installed fixtures, or if the tenant was hit by a neighbor’s car, the liability protection would cover the damage.