Insurance is a necessary expense for any investment property, bought with the hope you’ll never have to use it. However, with the variety of emergencies, disasters, and unexpected problems that can arise, having the right insurance coverage is essential to protect your investment and reduce liability.
When Was the Last Time You Reviewed Your Insurance Policy?
If it’s been longer than a year since your last policy review, now is the time to reach out to your insurance agent. Property values, local risks, and insurance products change regularly, so it’s important your coverage keeps pace.
Common Insurance Questions Property Owners Should Ask
Do You Still Have Homeowner’s Insurance from When You Lived in the Property?
If you previously lived in your rental property and never updated your policy after moving out, your homeowner’s insurance may no longer be valid for a rental. It’s important to switch to a rental or landlord insurance policy designed specifically for investment properties.
What Is a Rental/Landlord Policy?
This policy includes basic fire and liability coverage plus additional protections tailored to landlords. It typically covers damages caused by fire, vandalism, natural disasters, and often includes loss of rental income if your property requires repairs.
Have You Shopped for New Insurance Quotes Recently?
Shopping around for competitive insurance rates is smart—but never let your current policy lapse while you’re comparing options. Many insurers are renewing existing landlord policies but restricting new ones due to risks like mold or regional disasters. Always confirm your new coverage is active before cancelling your old policy.
Is Your Coverage Adequate for Rebuilding and Liability?
Insurance should reflect the current replacement value of your property, not just the original purchase price. Property values can increase substantially over time.
Liability coverage is equally important. A minimum of $100,000 may no longer be sufficient to cover legal costs in today’s litigious environment. Consider umbrella policies offering $1 million to $2 million or more for added protection—consult your agent for guidance.
Beware of terms like “all risk” — these policies often exclude many specific perils, so review coverage details carefully.
What Should Liability Insurance Cover?
The most comprehensive landlord policies protect you from:
Injuries occurring on your property
Defense costs in personal injury lawsuits
Claims of slander, discrimination, unlawful or retaliatory eviction
Invasion of privacy claims by tenants or their guests
While some coverages might not be available from every insurer, strive to secure the broadest protection possible.
Administrative Tips: Who Receives Your Insurance Policy?
Ensure that your insurance documents are sent to the correct parties—you, your mortgage lender, and your property manager. Mortgage companies often purchase expensive “force-placed” insurance if they believe your policy has lapsed, which can cost you significantly. Your insurance agent can help manage proper distribution.
What About Tenant’s Personal Property?
Most landlord policies do not cover tenant belongings. It’s highly recommended that tenants purchase their own renter’s insurance to protect their possessions and reduce disputes.
Don’t Wait Until It’s Too Late
Review your rental property insurance policy at least once a year with your insurance agent. This ensures your coverage reflects the current value of your property, protects your income, and limits your liability risks.
Oracle Property Solutions
Partnering with you to safeguard your investment through smart management and advice.
