For many of us, the differences between landlord and homeowner’s insurance policies aren’t all that obvious. If you own an investment property, though, understanding the difference between the two types of insurance is important. Expand on your knowledge of this essential protection in 2016 with a little help from our February post.
For those who only rent out their properties sporadically, homeowner’s insurance may be enough. Most of us should consider upgrading to landlord insurance, though, for the following reasons:
- Liability protection
- Legal protection
- Protection against uninhabitable conditions
Most homeowner’s insurance policyholders take care of their property. Renters have less at stake, leaving landlords vulnerable to damage-related expenses and court costs. When you consider all that could go wrong, landlord insurance seems like a pretty good way to invest your money in 2016.
If a renter wins a property damage or injury claim lawsuit, your assets could be liquidated or attached. A good policy covers damages and legal fees, protecting the nest egg you’ve worked so hard to build. Few homeowners need to worry about this type of coverage, but most landlords should.
In addition to court costs and damages, your policy may even include the cost of legal counsel. This is an important consideration, since legal representation alone could wipe out profits from your investment property. The average homeowner’s insurance policy does not cover legal protection.
Uninhabitable Structure Protection
One of the best reasons to think about landlord insurance this February is the possibility that a rental property could become uninhabitable. Besides the cost of restoring a house or building to a livable state, many landlords would be hard-hit financially by the long-term loss of income from an uninhabitable structure.
With so much at risk, it’s easy to see why landlord insurance is a much better bet than homeowner’s insurance. If you own at least one investment property, February is as good a time as any to appreciate the differences between landlord insurance and homeowner’s insurance. Protect your financial well-being in 2016 with a greater understanding of financial considerations for landlords.
Call Property Alliance at (877) 545-0333 to learn how you can maximize profits from your investment property.