A common mistake among people who own income properties in Campbell, CA, and the surrounding areas is not having the necessary insurance. Homeowner insurance alone is usually not enough. When you rent out property, you are in effect a business operator, and that makes you susceptible to additional liabilities. Protecting against this added risk is one of the greatest arguments for seeking assistance from a property management firm. In light of this, let’s consider the kind of property management insurance that a landlord may need in order to fully protect his or her interests.
Landlords’ insurance is the single most important policy a property owner can possess in addition to the core insurance policy, such as home insurance. Some states even require it by law, and many property management firms in Campbell, CA, and elsewhere simply won’t manage an income property without such a policy in place. A tenant who falls and requires medical attention is not covered by your home insurance but would be covered by this policy. Likewise, while the home policy may cover storm damage to a roof, it is this policy that would cover the loss of rent if the damage caused the renter to move out.
Vacant Property Insurance
An additional landlord protection that a property management company like Keyrenter Silicon Valley often recommends is vacant property insurance, which kicks in when the property is unoccupied. Such protection is sometimes available as an aspect of the landlord insurance policy. These policies protect against vandalism and squatting, but they also provide coverage when other insurance fails due to a lack of occupancy. For instance, home insurance often won’t cover roof damage when no one is living there.
Natural Disaster Insurance
There are a number of different natural disaster policies that a landlord can possess, and a property management firm like Keyrenter Silicon Valley will often recommend an umbrella policy. Since strong hurricanes aren’t common in California, hurricane insurance likely doesn’t make sense, but umbrella coverage that includes hurricane coverage isn’t a bad idea. Natural disasters that should be a point of focus include floods, earthquakes, and fire. You may wonder why fire is important since it’s usually included in home insurance. However, fire insurance for an income property extends to loss of use, which can be a significant expense if the structure requires major renovation or rebuilding.
Personal or Commercial Umbrella Insurance
Another policy that’s as crucial as landlord insurance is a personal or commercial umbrella insurance policy. A PUP is intended for property owners with several or fewer properties, and the commercial policies are intended for those with more. This insurance protects your personal finances in the event that your liability extends your other coverage. For instance, if a tenant sues you and is awarded an amount that exceeds the maximum benefit of your landlord insurance, then the court would have access to your personal assets to pay the remainder unless you had a PUP that covered the difference.