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Asset Protection & Insurance: Is Your Homestead Rental Property Covered?

Filling Out Insurance Paperwork with a Model House in the ForefrontIt is common knowledge that Homestead landlords require high-quality insurance to shield their real estate investments. However, there are lots of types of insurance, and each has different coverages and limits. This can make figuring out which insurance you need quite difficult. Among the options available are landlord or investor insurance, landlord liability insurance, umbrella insurance, and flood insurance, to name a few. Seeing as various kinds of insurance are designed to protect specific items, knowing the function of each can aid you in deciding how to protect the assets of your rental property with the suitable type and amount of coverage. 

Landlord Insurance 

Landlord insurance is one of the most valuable types of insurance that rental property owners desire. Landlord or investment property insurance shields investment property, unlike homeowner’s insurance. This insurance typically covers the rental home as well as exterior features like sheds and fences. The majority of Homestead property managers mandate that their tenants purchase their own renter’s insurance policy, as well as occasionally tenant liability insurance because landlord insurance does not cover your tenant or your tenant’s personal property. 

Landlord Liability Insurance 

Landlord liability insurance is a different crucial type of insurance you should be aware of. Although landlord liability insurance is distinct from investment property insurance, it is commonly included in policies. This is because this kind of insurance covers liabilities in the event of an injury as well as losses related to damage, theft, or vandalism committed by tenants or their visitors. The purpose of landlord liability insurance is to safeguard both the financial aspects of your investment and your rental property. 

Umbrella Insurance 

An umbrella policy is exactly what it implies: broad protection for a rental property that offers an extra layer of safety for those who own real estate or work in a field that is subject to lawsuits. As a landlord, you fall under both of these categories, so you should consider getting an umbrella policy to protect your assets if you are sued for more than your other insurance policies will cover. In addition, these policies generally defend the insured against loss of rent, destruction to other people’s property, and injuries caused by third parties, such as a tenant. 

Flood Insurance 

Even an umbrella policy does not normally include flood-related losses to rental property. For numerous reasons, flood insurance is typically sold as a separate policy through the National Flood Insurance Program (NFIP). This kind of insurance usually covers the actual cash value (not the cost to replace) of the home’s physical structure and, if applicable, a detached garage. Though many Homestead property owners believe they don’t require flood insurance because their home is not situated in a “high-risk” area, the truth is that floods can and do happen anywhere and frequently occur without warning. Floods frequently cause home destruction and damage, whether they are caused by burst pipes or unusually heavy rain. 

Given the wide variety of insurance options available, it’s important to closely consider your coverage amounts to both make sure you aren’t paying for insurance you don’t need and that the insurance you do have offers the appropriate level of coverage. Nevertheless, unless you have dependable industry experts on your team, determining whether you have the appropriate insurance coverage can be difficult. At Real Property Management Dade, we can advise you on the best insurance coverage to use to safeguard your valuable assets and financial stability. To learn more, contact us online or call us at 305-501-1511.                              

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