If you've only just started working in the rental property world, you might be wondering if you can use your current Homeowner's Insurance instead of investing in new insurance. Your Homeowner's policy might provide some coverage if you rent just one room in your house or only rent your primary residence out every once in a while.
But if you're exploring property management, Virginia Beach, you'll likely find that they have suggestions for how landlord insurance can help you. If you are renting a separate building out or have long-term renters, for instance, you'll find that a landlord insurance policy will offer much better protection for you and your investment.
Differences From Homeowners Policies
Homeowner's policies for insurance are explicitly designed to cover you in cases that a typical homeowner would experience, some of which are likely to occur in any ownership situation. After all, if a natural disaster or a storm causes damage to the property, similar coverages will protect your investment in the building by paying for repairs after your deductible.
However, homeowner policies are also designed specifically to your personal property and how you would repair your primary residence in case of vandalism or natural disasters. In contrast, landlord insurance is specifically attuned to the responsibilities and liabilities of being a property owner.
One big change in coverage is that landlord insurance doesn't include renters insurance for your residents' personal belongings. You can encourage them to get this kind of insurance themselves, but it isn't typically something a property owner will purchase and be responsible for providing.
Most real estate investors opt to purchase additional coverages beyond what their tenants purchase. This additional insurance helps in situations that traditional homeowner's insurance isn't designed to handle. For one thing, the activities in the property itself are now different and not entirely under your control: if a legal case determines that you were responsible for putting a stop to, say, illegal activity in your rental property, what would you do? The unique offerings of a landlord insurance policy can make sure you're covered.
While some coverage may be strongly recommended, it's not required by law in Virginia Beach. Still, you'd be wise to see it as part of your risk mitigation strategy, and you can choose either a large policy that covers a variety of different circumstances or a smaller policy that doesn't cover as much. Here are some of the kinds of coverage you may choose to take on.
Loss of Rental Income Coverage
Rent loss insurance is an optional coverage that can be comprehensive enough to kick in when you don't have a renter in your property. It's often tied to particular kinds of damage to the building. If, for instance, repairs to the building will take two months, the insurance might cover you for the market rate rent for those months, but wouldn't cover any time after that if it took longer to find a new renter. You'll have to look at the coverage you are considering to ensure that you've chosen a policy that covers you in the circumstances that matter most to you.
Liability coverage is one of the standard coverages in a landlord policy, different from a normal homeowner policy. It's structured such that if you are found liable for a particular injury or property damage, your insurance will pay out rather than you getting involved in a costly lawsuit. These kinds of liabilities might include, for instance, someone who breaks their ankle because a floorboard isn't well-installed. Perhaps you had no idea that the floorboard was loose, but you might still be considered responsible.
Property Damage/Acts of Nature Coverage
These landlord policy elements will apply to the structure of your home, but for personal property, they may only apply to furnishings or other items related to the property being rented. So, if you store personal belongings on the property that aren't specifically for maintaining the property, they may not be covered under this policy. You'll want to talk to your insurance agent about what specifics are covered and in what kinds of disasters. Floods, for instance, are often not covered unless you have a special addition of flood insurance, so check to see what your policy really includes.
Let a Property Manager Help You Verify What Coverage You Need
Property management Virginia Beach is here for you in many ways, but our knowledge of what coverages have come in handy in the past for our clients can be a major benefit to any property owner. We'll help you understand what homeowners insurance does differently from landlord coverage. Given your current rental property situation, we can help you decide which optional coverages might be a good fit for your situation. Your insurance agent is also a valuable resource for the coverages' nitty-gritty details and making sure that you aren't leaving anything out that you really want to be there. Want to learn more about what property management Virginia Beach can do for you? Our guide shares tons of valuable information for getting started!