Do Your Rental Properties Have the Right Coverage?

Posted on 3 March, 2023

Rental properties can be lucrative, but they also come with significant risks. Repairs, renovations, and tenant disputes can impact return on investment, leaving landlords without sufficient revenue. How can businesses safeguard rentals? The key is identifying risks and obtaining the proper insurance coverage.

What Dangers Can Affect Rental Properties?

Natural disasters are a significant concern for landlords, especially if they own properties prone to extreme weather. For instance, beachfront properties are more vulnerable to hurricanes and flooding, making them high-risk despite their value as luxury residences. Wildfires, while not constantly naturally occurring, have also become a significant concern, especially in places struggling with drought. Heavy snows, rain, and hail also pose issues, especially if the location doesn’t have the proper infrastructure to deal with excess precipitation.

Unfortunately, acts of nature aren’t the only dangers. Living spaces can experience fires from faulty wiring, clogged lint traps, and misused appliances. Burst pipes and leaky sinks can cause water damage and even attract termites. Speaking of pests, wildlife can produce all sorts of problems:

Mice chewing through wiring
Squirrels damaging rooftops
Rats dismantling insulation
Woodpeckers destroying fence posts
Carpenter ants decimating internal structures

These animals can do thousands of dollars in damage and pose health risks to tenets.

Unfortunately, the last danger you must consider is the tenets themselves. While most renters are respectful and abide by the lease, a few have no problem wrecking furniture, breaking appliances, and trashing your property. Cleaning up this mess can eat into your profit margins, potentially making the rental more trouble than it’s worth.

What Is Landlord Insurance Coverage?

Homeowners insurance protects properties where the owner resides but doesn’t cover rental properties owned by commercial enterprises. Instead, these entities need landlord insurance coverage, which provides the same benefits as homeowners policies — plus a few that only apply to tenet-occupied properties.

How Do Landlords Benefit From Rental Properties Insurance?

Rental property insurance creates a safety net for landlords. If things break down, the insurance company can cover the costs of significant appliance maintenance and repair. Additionally, your landlords insurance can protect you from liability, so if a tenant or guest sustains an injury on your property, your policy should cover any legal fees or settlement costs. The company may even pay for associated medical expenses depending on the circumstances.

Do You Have Proper Coverage for Your Rental Properties?

More than insurance is needed to protect your assets, as it’s possible to underinsure a property. You can lose significant profit if you’re unsure how to know if a rental property has proper coverage. Fortunately, you can determine the correct coverage level by analyzing your options.

First, pay close attention to policy limits. For example, if the property value exceeds a certain threshold, you may need supplemental high-value insurance.

You should also note any coverage exceptions. For instance, many policies don’t cover flooding, leaving you with cleaning, mold remediation, and water damage repair costs. In most cases, you can purchase additional insurance to fill these gaps.

Finally, remember to update your rental property policies. Renovations and new appliances can affect the value, which your insurance company must know.

About Byrnes Agency

At Byrnes Agency, we offer insurance solutions that can be tailored to meet your specific needs. Whether you’re looking for personal policies or commercial coverage, we have the right coverage for you. To learn more about our products, contact us today at one of our two locations.

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Dayville Office

Phone: (860) 774-8549

394 Lake Rd

Dayville, CT 06241

United States

info@byrnesagency.com

Hours of Operation: Monday- Friday 9:00am-5:00pm

Norwich Office

Phone: (860) 886-5498

6 Consumers Avenue

Norwich, CT 06360