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Asset Protection & Insurance: Is Your Redbank Rental Property Covered?

Filling Out Insurance Paperwork with a Model House in the ForefrontIt’s no secret that Redbank landlords demand substantial insurance to preserve their real estate investments. However, there are lots of types of insurance, and each has different coverages and limits. This can make determining which insurance you need quite difficult. A few examples include landlord or investor insurance, landlord liability insurance, umbrella insurance, and flood insurance. Understanding the functions served by each type of insurance can help you determine the best type and amount of coverage to use to protect the assets associated with your rental property since various types of insurance are made to protect various things. 

Landlord Insurance 

Landlord insurance is among the most essential forms of insurance for owners of rental properties. Landlord or investment property insurance protects investment property, as opposed to homeowner’s insurance. This insurance typically covers the rental home as well as exterior features like sheds and fences. Because landlord insurance does not support your tenant or your tenant’s personal property, most Redbank property managers require tenants to purchase their own renter’s insurance policy and sometimes tenant liability insurance. 

Landlord Liability Insurance 

Landlord liability insurance is a different crucial type of insurance you should be aware of. Landlord liability insurance varies from investment property insurance but is typically part of the policy. This is due to the fact that this kind of insurance covers liabilities in the event of an injury as well as losses related to damage, theft, or vandalism committed by tenants or their visitors. The objective of landlord liability insurance is to preserve and protect your investment and the rental property. 

Umbrella Insurance 

An umbrella policy is exactly what the name implies: wide coverage for a rental property that supplies an additional layer of protection for people who own property or have a lawsuit-prone occupation. Given that being a landlord falls under both of these categories, it is essential to think about getting an umbrella policy to protect your assets in the event that you are sued for damages that exceed the scope of your other insurance coverage. In addition, these policies generally defend the insured against loss of rent, destruction to other people’s property, and injuries caused by third parties, such as a tenant. 

Flood Insurance 

It is worth noting that even an umbrella policy normally does not cover flood-related losses to rental property. Flood insurance is typically provided as a separate policy that must be bought through the National Flood Insurance Program (NFIP) for a variety of reasons. The actual cash value (rather than the replacement cost) of the home’s physical structure and, if applicable, a detached garage are typically covered by this kind of insurance. Since their property is not situated in a “high-risk” area, many Redbank property owners believe they do not require flood insurance; however, in actuality, floods can and do occur anywhere and frequently happen without warning. Regularly, flooding damages and destroys homes, whether caused by a burst pipe or an unusually heavy downpour. 

With several different types of insurance, it is essential to carefully examine your coverage amounts to make sure that you are not paying for insurance you do not need and that the insurance you have provides adequate coverage. However, establishing whether you have the proper insurance coverage can be difficult if you do not have industry experts on your team. Real Property Management Your Home can help you select the best insurance coverage to guard your valuable properties and financial well-being. To learn more, contact us online or call us at 423-704-9944.                              

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