Renting out or leasing an empty property is a great way to generate additional income. Getting the right type of tenant requires some effort on your part. But at times, that won’t be sufficient, and you end up with people who are more trouble than they are worth. Else, your property might be hit by a calamity and include tenants occupying it.
Rental property insurance is present to mitigate such risks. Getting the correct rental property insurance quote will get you covered for eventualities as per your convenience.
What Comes with Rental Property Insurance?
Generally, rental property insurance, also called Dwelling Fire Insurance or Landlord Insurance, has categories to choose from, covering different numbers of risks under each. Knowing the various categories will help you get the quote you want.
Basic Policy
This has the least coverage and is also the cheapest. Upon claim, you will get the amount covering damage from the stated eventualities without coverage of the depreciation of your insured items’ value.
The events you are protected against in DP-1 include fire and lightning, smoke, aircraft, vehicles, explosions, wind storms and hail, vandalism, riots, volcanic explosions, and the lack of rent-ability of property due to these events. In the latter scenario, the money will be reimbursed.
Secondary Level
This is the next level and covers all of the events in the previous one plus additional ones. It is a bit more expensive, but also more extensive. Depreciation is again not included during the claim.
The additional events covered are Collapse, Falling Objects, Frozen Pipes, Broken Glass, damage from Weight of Snow and Ice, Electrical damage, Burglary related damage, and Accidental Water Overflow.
Maximum Coverage
This is the complete package and has the most extensive coverage. The rental property insurance quote for this will be the most expensive of the lot. It, too, doesn’t account for depreciation, though. Instead of events covered, the policy lists exceptions since it covers so many.
These exceptions are Nuclear Hazards, Movement of Earth, Flood/Water damage, Power failure, War, Negligence, Intentional damage related loss, Governmental Action, Law/Ordinance, and Mold.
Liability Inclusions
The liabilities you may owe to your tenants for any injury due to your property can also be covered. It will enable you to get a claim to pay for any medical or legal liabilities resulting from actions taken by the tenant against you. The policy limits determine the coverage costs. Additional protection may be included with the opting of umbrella insurance for the property.
Lack Of Rental Income
Damage to the building could also result in not being able to generate rental income from it. In these cases, the rental insurance can pay the money you would get if the damage hadn’t occurred. This is subject to the limits of the policy coverage amount.
Other Affecting Factors
Maintenance and any property of the tenant that gets damaged will not be covered. Nor will sewerage-related problems, especially on the street level. Besides these, location, the likelihood of events occurring in your region, insurance provider, etc. will alter your quote.
Your rental property insurance quote might extend beyond or fall short of the national average of $1350 annually. Consulting a good, independent agent will help get the most for the least amount you need to pay.
