To completely protect your Irvine investment property, landlord insurance is a good starting point. However, you want as much protection as possible, so make sure you’re not simply looking for coverage that meets the minimum standards. You need to make sure you’re protected against physical and financial loss, and you also need to consider loss of rent, tenant claims, and liability.
Here’s how to tackle insuring your Irvine rental property. We aren’t insurance agents, but as Irvine property managers, we work with owners and investors to protect their assets. We can help you put together a plan for coverage and if necessary, we can refer you to some of the insurance professionals we work closely with.
Insuring Property Coverage for Irvine Rental Property
The main difference between your landlord insurance policy and the homeowner’s insurance policy you have on the home you live in is that your landlord policy covers the structure of the home and the costs to repair and replace it. However, it doesn’t cover any personal belongings that aren’t yours.
When you live in a home, your insurance covers the structure and all your belongings. But, with a landlord policy your home is covered, but not the tenant’s personal items. This is why renter’s insurance is critical, which we’ll discuss at the end of this blog.
Make sure your policy covers the complete repair and replacement costs that may be needed for your investment. If you bought the property 25 years ago, the cost to rebuild now may be far higher than the cost from more than two decades ago.
Landlord Insurance Protects Against Liability
A good landlord insurance policy will also have adequate liability coverage.
This is important, because anything can happen when tenants are living in your property. Talk to your insurance agent about the required or recommended liability limits. If something happens and you’re sued, you want to be protected.
Always Include Loss of Rent Coverage
When you’re renting out your property, you may have to pay for your renters to stay somewhere else while the property is being repaired or rebuilt. You’ll also have to cover your mortgage payments, so make sure you have a loss of rent inclusion on your insurance policy. Some landlord policies will include it, and if yours does not, make sure to add it.
Consider an Umbrella Policy
An umbrella policy takes your normal policy and adds an umbrella, or up to a million extra dollars of protection. The cost of extra coverage is usually pretty cheap. Just remember that the umbrella policy only increases your liability coverage, not the insurance for rebuilding your property. That’s an important distinction.
Renter’s Insurance for Irvine Tenants
Renter’s insurance benefits your tenants because it covers their personal belongings. If a tree crashes through a window during a bad storm and their electronics are damaged, they’ll need renter’s insurance to cover the replacement cost.
There’s also a liability element to renter’s insurance policies. If your tenant causes damage, your property insurance would cover it, but if it’s the tenant’s responsibility, they should be held accountable by paying for it with their own policy. This will keep your premium lower and your claim report clear.
As you can see, to adequately protect your Irvine investment property, you need more than a basic landlord policy. For more information about protecting your rental property, please contact us at HCM Property Management.