What is property owners insurance?
Property owners insurance is a special kind of insurance for landlords and people who own property. You will need to pick up property owners insurance if you own any kind of property that you don’t use yourself, including unoccupied property.
Can I buy normal household insurance instead of property owners insurance?
No, because there are more risks involved. Unoccupied property is easier to rob. Also, tenants may damage property that you rent out.. Property owners insurance is therefore slightly more expensive compared to normal household insurance. If you carry normal household insurance on property that you rent, the insurance company will deny your claim if there is an accident.
What does property insurance cover?
Every insurance plan is different, so be sure to read the fine print before you sign. However, most “all risk” property insurance plans cover the following: liability, building damage, contents, glass, the cost of alternative lodging after an accident, legal costs, loss of rent, vandalism and terrorism. If you want to lower your premium, you can opt out of certain kinds of coverage if you don’t think it’s necessary.
What does “loss of rent” mean?
Loss of rent coverage covers you in the event that some kind of disaster destroys your property to the extent that you can no longer rent it out. The insurance company will pay for rent income you would have received if the accident had never happened.
What does “rebuild cost” mean?
Rebuild cost is the total amount of money needed to rebuild your property. If your property is very expensive, your insurance costs will be pricy. Your insurance costs will also go up if the cost of your property suddenly increases in value, so be sure to plan ahead if your assets are located in an area where the property value is rising. Have an independent qualified surveyor take a look at your property first before you buy insurance to get an accurate idea of how much your property is worth.
If my tenants suddenly vacate my property, do I need to adjust my insurance coverage?
Yes. If your tenants leave, your property becomes an unoccupied property. Just let your insurance company know after your tenants move out and your insurance agent will adjust your policy accordingly. Failure to let your insurance company know that your tenants have moved out can be problematic if something happens to your property while it is unoccupied.
What are some common exclusions?
Be sure to go through your contract and look for any exclusions before you sign. Exclusions are scenarios in which the insurance company doesn’t have to pay you. Some insurance companies word their exclusions in clever ways. If you don’t catch the loopholes, you could get denied if you attempt to make a claim. Common exclusions on building insurance plans include nuclear war, earthquake damage and drinking water contamination.