When it comes to your investment property the insurance must be handled very differently than your homeowners. Our staff at AIA is very well versed in insuring rental property as it is a large percentage of the property we insure. Here are a few things you need to consider before purchasing insurance for your investment / rental property:
- The actual type of insurance policy required to properly insure your investment property is referred to as a dwelling fire policy, this is not the same as a homeowners insurance policy.
- The next major decision you need to make is would you rather insure the property for full replacement cost or simply the amount you are purchasing it for. For example, the image above is an investment property I personally own which was purchased for $52,000 but with it being over 1,200 sq. ft that would not be enough coverage to re-build in the event of a total loss.; obviously insuring the property for full replacement cost will increase the costs but you would be able to completely rebuild the property.
- If you do not insure your rental property for full replacement value there may be co-insurance penalties reducing the payout in the event of a claim. In short if full replacement cost for a property is $100,000 but you insure it for $50,000 a partial claim may be paid out at 50% of the damages because the property in this example was insured for 50% of the value. This is possibly the one of the most important factors you need to familiarize yourself with.
- Do you need any contents coverage for your investment property? While you are not concerned for the contents of your tenants you may have items such as appliances that will need to be insured, typically we include $5,000 in contents coverage to cover these items.
- Should I require my tenants to carry renters insurance? Check out the video below
We would love to work with you to learn more about the coverage options you have for your investment / rental property. If you would like us to provide a quote for your investment property please complete the secure form below to get started.