Sacramento has one of the hottest housing markets in the country and is ranked number one in California. That is great news for investors, but it also means increased competition among homes for rent.
Property owners must put their best foot forward to keep properties rent. They also must take steps to protect their investment, including having the right insurance coverage.
This article explains the basic insurance plans available to landlords and investors. Keep reading to find out which ones might be right for your real estate business.
Property Insurance
One of the most basic types of insurance plans is property insurance. These policies cover physical damage to itself. This includes events like
- Fire
- Theft
- Vandalism
- Natural disasters
Look closely at the fine print in each policy to discern where coverage exists and where it might be lacking.
Landlord Insurance
Landlord insurance is a special type of coverage that also protects against damage in homes for rent. These plans also often include several unique but valuable pieces.
One is liability coverage. Property insurance policies often have liability, but they take a different form.
These are usually intended for guests (not tenants) who may become injured when visiting your home. Landlord insurance, on the other hand, protects you from legal liability from renters who become injured or sue you for other types of damages, such as those related to evictions.
Rental Insurance Income
Rental insurance income is a type of coverage often included in other types of plans, such as landlord insurance, though it can also be purchased on its own as well. As the name suggests, it covers loss of income related to long-term rentals.
These plans kick in if, for instance, a renter causes damage that makes the landlord take the property off the market. The policy acts as a safety net against any financial losses.
Short-Term Rental Insurance
If you occupy the property part of the year but lease it out as a vacation rental, a combination of property and short-term rental insurance may be the best option. These policies cover rental property damage caused by tenants in vacation homes or other temporary rentals.
Workers' Compensation Insurance
If you have employees, including property managers, who work for your real estate business, you need workers' compensation insurance. This is a type of insurance that provides financial benefits to employees who are injured or become ill as a result of their job.
Umbrella Insurance
Umbrella insurance expands the level of liability protections both in terms of dollar amount and area of protection. For instance, plans might cover libel and slander or unique types of personal injury claims. These plans can be valuable if a landlord feels that they are particularly vulnerable to certain types of accusations.
Learn More About Coverage for Anyone with Homes for Rent
Insurance is important, and having the right type is vital for any real estate business owner. Use the information above to determine the best coverage for you.
At Residential Equity Management, we pride ourselves on being leaders in the local real estate market and property management community. We offer a variety of services and owner resources, including advertising homes for rent. Contact us today to schedule a free consultation.
