Landlord insurance isn’t something that’s just nice to have — it’s absolutely mandatory now. You must always be thinking about your bottom line in everything that you do. Your properties are your investments, and they must be viewed as long term holdings that need to be protected at all costs.
This brings us right back to the subject of total landlord insurance. You may have a policy, but does it really offer the type of protection that you can count on? Perhaps an audit of your policy is in order…including its price.
Ignoring Landlord Insurance is Like Neglecting The Roof of a Rental Property — Danger Lurks Ahead of You!
You cannot ignore landlord insurance — you just can’t. Just as a car must have automobile insurance to take it out on the roads, a house must have proper landlord insurance to protect its value.
There are some landlords, reacting to the current slow economy, that actually cut off their insurance completely. While that saves you money, it is definitely not in a positive way.
It would be wiser to do what you can to minimize that type of liability if you can help it. The tips in the remaining part of the article should help you to do just that. Good luck!
Small Changes to Make Landlord Insurance Both Effective …and Affordable!
Have you gotten your property appraised recently? If you haven’t, you might not be getting the rebuild cost for your property accurately represented.
You may be making the mistake many landlords make — simply giving the value of the property as the sum insured. Get your professional survey done from a surveyor if it has been too long since that’s been carried out.
You can also lower your premiums by attracting higher caliber tenants. Don’t go for students right off the bat — many students have a temporary state of mind when it comes to where they live, meaning that they might not think very highly of your rental and proceed to damage it in some way.
The insurance company wants to lower that risk, so they will give you incentive to look for people who are in full time employment, with a high preference given to professionals.
You can also get a high quality intruder alarm on the property. Even if you’ve been a landlord for a while, it’s very easy to overlook security. There are just so many different tasks that are on your mind that it’s easy to forget a few things along the way.
The Road Ahead
A parting tip before this article comes to a close: just because you get new landlords insurance doesn’t mean that you are in the clear. Make sure that you check the policy thoroughly. Does it cover malicious damage?
Does it cover the structure of the home itself? These might sound like obvious questions that have obvious answers, but you might be surprised! If you don’t check out every single angle you can think of when it comes to landlords insurance, you could end up with another useless policy that really doesn’t take care of your needs.
Study the process to making a claim as well. You might think that a claim is straightforward until they want more documentation than you bargained for. You cannot cry ignorance and simply not do it. You need to instead always think about what could happen, and then plan accordingly.
Look, this article isn’t designed to scare you completely. Even though the Financial Times and beyond are negative on real estate for the time being, savvy landlords are realizing that real estate does indeed move in cycles.
This is the perfect time to review landlord insurance and really make sure that you are covered to the fullest. As the market improves, prices are bound to be on the increase. Yet you will not have to worry about it, since you are already covered. Good luck!