Getting a home or renters insurance policy is one of the smartest things you can do as a homeowner or landlord. Simply put, a home insurance makes sure that should an untoward incident happens within your property and damage is incurred, you get a sum of money from the insurance company that compensates you for that incident.
There are also many things to be considered if you want to get a home or rental insurance policy. It can be daunting for a new potential landlord or tenant. Moreover, there’s the question of whether or not you need to get an insurance policy in the first place. What if you really plan to take care of the place? Should you still get the policy? Supposing that you do get, what are the other things that you have to consider to make the most out of your insurance? Are there any special steps you need to take?
7 Things to Always Remember about Home or Renters Insurance
As the saying goes, if you’re going to err, always err on the side of safety. No matter how well you take care of your property or land, sometimes there just are some incidents that can’t be avoided.
These incidents will sometimes have you spending for much more than if you had just gotten insurance. Always play it safe, and get an appropriate policy. Here are some things to remember about home or rent insurance.
1. What the insurance covers
Home or renters insurance will protect your property, home, or unit against untoward incidents like property damage or losses. What a lot of people do not know is that policies also give you insurance if people sustain injury on your insured properties. If you’re thinking of getting insurance, make sure that you know all these.
- Property damage: What exactly does the insurance cover? The standard insurance policy usually covers any sort of damage to the insured property. Depending on the insurance policy that you acquire, there may also be other items that are covered. This could include coverage for novelty items such as collections, or coverage for damage due to negligence on the owner’s part. Make sure that you ask your landlord if you’re a tenant (not all policies cover personal items), or your insurance company if you’re a landlord.
- Loss of items and property: Standard insurance policies also property loss. This can be as a result of thievery, or loss of property due to damage and the like.
- Special coverage for specific items: In addition to those stated above, you may have to ask the insurance company if there are any items that you should pay extra for special insurance coverage. Jewelry or some types of electronics are covered under these.
- Natural disaster coverage: You also have to check for insurance coverage regarding natural disasters. In a large country like the U.S., the likelihood of natural disasters often vary from state to state. With this said, make sure that you check which natural disasters your insurance policy can cover.
2. For landlords: Make sure that your home insurance is a Landlord Policy
We cannot stress enough the importance of this. If an untoward incident happens on the property that you lease out and your home insurance is not considered a Landlord Policy by your insurance company, you probably will NOT get any money! This is not exactly a way of cheating you out of your hard-earned money. It’s because there are specific risks that are higher if you’re leasing out a property as opposed to you living in it yourself.
Who gets a home insurance for leased property without declaring it as a Landlord Policy? It’s usually not a deliberate act. Some cases in the past come from not realizing these specific clauses soon enough, or not changing the specific insurance policy after the property has changed hands.
Again, if you’re leasing out the property, make sure you declare the insurance as a Landlord Policy. Do a review of all the insurance policies that you enrolled in. Who knows, if you’re leasing out multiple homes or units, maybe one of their insurances isn’t declared as a Landlord Policy.
3. For landlords: Check if your insurance policy covers rental income protection.
This clause covers incidents that make you unable to earn income from rent of your property. There are many factors that can lead to this happening. These include your property being uninhabitable because of damage caused by a natural disaster, any sort of damage repair projects and renovations, or failure of tenants to pay the monthly rent. Take note though that the latter is situational, and not all insurance companies will cover that reason. In addition, there may be specific reasons that insurance companies may consider for you to be able to get the money.
While it’s good to always have a good insurance policy for your property, try to assess if you need this kind of coverage. If, for example, your building is a very sturdy one in an area where natural disasters are very rare, then it’s best to assess if you need this coverage. You may end up paying more for this coverage than what you will be earning for the renovations, and for months that the property will be uninhabitable.
4. For landlords and tenants: Check for legal and medical coverage
As stated above, some insurance policies may cover expenses that you may have to shell out if any damage to property or injuries to people happens within your own property. A common misconception that most people have is that only medical expenses will be covered by the insurance. Legal fees stemming from any lawsuits that occur can also be covered by the policy.
If you’re a landlord, make sure that you know what kind of coverage your policy provides regarding this. There are also some companies that will have a different coverage if you have multiple insured properties being leased out.
For tenants, make sure that you check with your landlord ALL clauses and coverage that the property insurance provides before you rent out a place.
5. For landlords and tenants: Check for personal property coverage
Personal property coverage will compensate for damage to furniture or attachments within the confines of the insured property. Not all policies will cover this, however.
For tenants, make sure you ask your landlord if the house or unit that you’re renting has personal property coverage. It doesn’t mean though that you can just treat the property haphazardly if the policy is there. Any damage can still give your landlord a reason to deduct money from your security deposit.
For landlords, make sure that you weigh out the benefits of having personal property coverage. If the place you’re leasing out is mostly an empty space, then you may want to reconsider. Ask your insurance company for more details.
6. For landlords: Make sure that the house, not just the land where it is built, is insured
If you don’t, you may end up spending more. This is because you will probably end up having to pay extra if the insurance policy covers the cumulative cost of both the house and the land underneath. Unless you have a very good reason to, make sure that the house, and not just the land, is insured.
7. Other considerations
Here are some other things to note regarding home or renter insurances:
- Severity and kind of damage: Some insurance companies may want to classify property damage based on quality. Make sure that you ask your insurance company about this.
- Storage insurance: Some policies will also cover any items that you have in storage.
- For tenants: Make sure you ask your landlord or the insurance company everything that the insurance covers. This is the best way for you to be aware of what the policy coverage is.
- For landlords and tenants: Make sure that you document everything. Make sure that you keep all receipts, written agreements between landlord and tenants, bills, and everything and anything that you may potentially need. This may make you seem like a hoarder, but better safe than sorry right? Who knows, maybe that little billing statement is what your insurance company needs as proof before they can release the money that is rightfully yours.
Home, renters, and landlord insurance policies are a must for any property
Before deciding to get an insurance policy, learn first which premiums or coverage are worth getting, and which ones are not. Aside from these, you also need to learn about all your rights and responsibilities as a landlord or a tenant.