When you work with Shine Residential Management, we’ll ask you to include our company as an additional insured on your landlord policy. This is to ensure we are on the same page and mutually protected in the event of a claim or lawsuit.
As you probably know, insurance is one of the best ways to protect your investment when you’re renting out a Killeen property. You need to make sure you’re fully covered and you also need to require that your tenants obtain their own insurance policy to cover their liability and personal possessions.
Landlord Insurance vs. Homeowner’s Insurance
If this is your first time renting out a property or you’re renting out a home you once lived in, you might think that homeowner’s insurance covers everything the same way it would if you were living there.
This is not true. You’ll need to switch to a landlord policy.
The main difference between your landlord insurance policy and the homeowner’s insurance policy you have on the home you live in is that your landlord policy covers the structure of the home and the costs to repair and replace it. However, it doesn’t cover any personal belongings that aren’t yours. When you live in a home, your insurance covers the structure and all your belongings. But, with a landlord policy your home is covered, but not the tenant’s personal items.
For this reason, we strongly recommend you require renter’s insurance of your tenants. For a minimal cost, your tenants can get a lot of coverage which will protect them in case of loss. If a fire sweeps through the property, your insurance policy will cover the loss. But, your tenant’s electronics, clothing, and furniture will not be covered. Make sure they understand that and insure themselves.
Landlord Insurance and Liability
A good landlord insurance policy will also have higher liability coverage than your average homeowner’s policy. This is important, because anything can happen when tenants are living in your property. Talk to your insurance agent about the required or recommended liability limits. If something happens and you’re sued, you want to be protected.
Loss of Rent Coverage
It’s important to cover yourself in case you have to move your tenant out of the property. Suppose there’s a wind storm that tears the roof off your home or the air conditioning dies during a central Texas summer and there’s a delay in getting the new system installed. Your tenants will not be able to stay in the home, which means you may have to pay for them to live elsewhere. You’ll lose a lot of rental income in addition to paying out of pocket for costs like hotel bills. If your landlord policy doesn’t already include loss of rent coverage, consider adding it.
Additional protections are always available when you’re buying insurance for your rental property, and you should consider them carefully.
Require Renters Insurance
Our lease agreements strongly encourage renters to have an insurance policy in place that covers their personal property. Our management system allows us to confirm that the insurance is up to date and in force. It also protects your insurance policy for claims that should be covered by the tenant.
Renters insurance is fairly common these days, and tenants are often willing to cover their own possessions.
An important thing to remember is that insurance premiums are tax deductible. We don’t think it’s ever a good idea to be cheap when it comes to insuring one of your most valuable investments. If you don’t have a reliable insurance agent, let us know and we can make some recommendations. Contact us at Shine Residential Management for any additional information.