If you are a landlord who needs home insurance for a rental property, you have two options for buying the coverage you need.
You can find an insurance company that serves the needs of property owners yourself or you can get assistance from an insurance agent. Take a look at your options for finding a policy and for getting the right type of policy.
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Find an Insurance Company
One way to find an insurer that offers property insurance for landlords is to approach your current insurer. The company that currently insures your home or car may also offer this type of coverage. Buying your property insurance from a company you are already dealing with may mean that you can get a better rate because you are adding another policy to your file.
Another option when you are starting from scratch to find home insurance for a rental property is to look for coverage online. You can start with insurance companies you are familiar with and visit each one’s web site to see if they offer this type of coverage or start with a keyword search for property or landlord insurance and your city or state to find some possible insurers. Even better, just use a rate quote tool that will give you quotes from several providers at once. Then narrow your search from there.
Get Help from an Agent
An independent insurance agent can also help you to find home insurance for a rental property. They can sit down with you to determine what kind of coverage you need and give you advice about how much protection you should buy. The agent can also shop the market for you and get quotes for coverage from multiple insurers.
The agent can also answer any questions you have about insurance and your policy provisions. He or she can explain the difference between a policy that covers you for cash value and replacement cost. This can make a huge difference in the long run; especially when you have strangers living in a property you own.
Cash Value and Replacement Cost
If you choose to insure your rental property for its cash value, your insurance company will pay an amount equal to its current value. This figure is calculated by taking the replacement value and deducting an amount for depreciation based on wear and tear. Like all insurance policies, the coverage only pays out up to the policy limit and you would need to pay the deductible first.
Replacement cost is the pricier way to go if you want to arrange home insurance for a rental property, but it provides a better level of protection. With this option, the insurance company pays for the cost of rebuilding and re-outfitting the property in the same way that it was before the loss.
Keep in mind that this coverage option does not give you the option of taking a cash settlement. The insurer will need to have confirmation that you have actually had repairs done or a contractor is doing a rebuild before it will pay out on the policy. You may need to pay for these costs yourself and submit receipts to the insurance company for reimbursement.
Beyond Basic Coverage
Whatever type of policy you decide to buy for your rental property, you need to understand what you are paying for. Choosing comprehensive coverage may be your best bet, since this option protects from several types of loss – except for the exclusions that are set out in the policy.
You will want to be sure that you have liability coverage in place to protect yourself. This part of the policy protects you if someone is injured while in the common areas of the property. Losses due to fire, theft or vandalism should be covered under the policy you choose. If the building has a mortgage, your lender will probably require you to have appropriate property insurance coverage in place.
You can also consider whether you want to add optional coverage when you buy your home insurance for a rental property. Along with having to deal with making repairs to or rebuilding the property, you will also need to decide if you want to pay for insurance that will compensate you for loss of rental payments. Coverage for theft, acts of mischief, and any outbuildings on the property is also available.
Rental Property Homeowners Insurance Rates
When you are looking for home insurance for a rental property, you need to consider your options carefully. Shopping around for coverage is a great way to get the protection you need at a price you can afford. To learn more about what different companies can offer you, try our free rate quote tool.
The tool is free to use and can give you the information you need to make the right decision about your rental property home insurance coverage.
Enter your zip for free rental property home insurance rates online now!