COVERAGE IS THE MOST IMPORTANT ELEMENT IN YOUR INSURANCE POLICY.
RECOMMENDED RENTAL PROPERTY COVERAGES
Dwelling Coverage
Landlord Contents Coverage Loss of Income Coverage
Loss of Income Coverage
Rent Guarantee Coverage
General Liability Coverage
Legal Assistance Coverage
RENTAL PROPERTY INSURANCE
WHAT IS IT?
WHO NEEDS IT?
COVERAGES
What is rental property insurance?
Rental properties represent a significant investment of financial resources, and often of time too. Consequently, these investments should be protected against loss when it's possible to do so. Rental property insurance makes it possible for Texas landlords to protect their properties in many situations.
Rental property insurance is crafted specifically to offer protections for residential rental properties. It's carefully tailored to address the unique needs of landlords.
Despite some similarities with homeowners insurance policies, rental property policies have distinctions that make them more appropriate for rental properties.
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Which real estate investors in Texas require investment property insurance?
Generally speaking, landlords in Texas owning rental properties should consider investment property insurance. Policies normally are available for most sizes of properties.
Moreover, policies are commonly purchased by a variety of investors ranging from individuals and businesses that manage many properties full-time, to investors who have one or two properties that they work on part-time.
In many cases, landlords who have financed their investments through rental property loans are often mandated to maintain some form of insurance. Lenders usually stipulate specific coverages to ensure that the remaining loan balance is covered, even if the property is destroyed. And, additional protections are strongly recommended.
Can rental property policies adequately cover mixed-use properties?
Rental property policies are primarily designed for residential properties, and not so much for properties with commercial tenants. Investors with mixed-use properties usually require a different form of investment property insurance that covers both residential and commercial units. An insurance agent who knows rental property policies can likely also help with insuring mixed-use property too, though.
What kinds of coverage can investment property insurance policies offer?
Investment property policies offer a broad array of coverages, addressing various needs that landlords have:
- Dwelling Coverage: Typically protects a main building and other structures present on the property.
- Landlord Contents Coverage: Typically protects appliances, landscaping equipment, and other items a landlord keeps on the property.
- Loss of Income Coverage: Typically protects against income losses arising from situations that render a property unlivable.
- Rent Guarantee Coverage: Typically protects against income losses arising from situations where tenants don't pay rent.
- General Liability Coverage: Typically protects against lawsuits alleging that the landlord is responsible for injury or property damage.
- Legal Assistance Coverage: Typically protects against legal costs not stemming from lawsuits, such as attorney fees for obtaining a judgment.
Do landlords need landlord contents coverage in their policy?
Whether landlords should get landlord contents coverage depends on their property and how they manage it.
It's an especially important coverage to consider if renting out furnished apartments, as the coverage normally protects furnishings that a landlord owns. The coverage is also usually helpful if a property has a coin-op washer and dryer, or if lawn care equipment (possibly including sprinklers and mowers) is stored on a property.
Landlords who don't provide furnished apartments or laundry facilities might not need landlord contents coverage, especially if they keep a mower at their house or hire a landscaping service.
Before forgoing landlord contents coverage, though, landlords should speak with an agent who's knowledgeable about these policies. An agent will help landlords think through all of the equipment that this coverage might be needed for. Sometimes it's helpful even if just insuring an air conditioner or kitchen appliances.
Is rent guarantee coverage necessary for landlords?
The necessity of rent guarantee coverage for landlords is largely dependent on their reliance on rental income.
Landlords requiring regular income to cover loan payments, salaries, or personal income should seriously consider this coverage. Additionally, landlords with outstanding loans might be obligated to purchase this coverage.
Part-time landlords with rental units as an additional income source may not rely on tenants' payments to cover living costs. In these instances, it might be feasible to forego rent guarantee coverage.
Again, this is something that a knowledgeable insurance agent can help assess.
How can Texas landlords acquire rental property insurance?
If you're seeking rental property insurance for your investment properties in Texas, reach out to the independent insurance agents at Sargent Fifty-Five Insurance. We're committed to helping you to find an investment property insurance policy that provides the coverages your properties require.
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