I’m a Landlord, What Type of Property Insurance Do I Need?
As any landlord will tell you, managing one rental property can be a headache, what with all the issues related to tenants, taxes, repairs, etc. Ordinarily, that headache would increase as the number of properties increase, but it doesn’t have to be that way.
With proper management, having multiple properties should not cause undue hardship, especially when it comes to insurance. A landlord definitely does not need to be keeping track of multiple individual insurance packages; rather, specialized insurance like the Multiple Property Insurance is the way to go.
Multiple Property Insurance
Some landlords tend to add more properties to their portfolio over time, and these properties come with individual insurance coverages of their own. These various policies become difficult to manage over long periods, because keeping track of all of them can be cumbersome. Instead of having so many individual policies, the landlord can have these policies combined into one policy.
This means that the information in the policy needs to be reviewed and renewed as necessary on a regular basis, so that as new properties are added to the portfolio, and other properties sold, those changes can be easily addressed in the policy. This makes the insurance coverage more straightforward and easy to keep track of. When taking out multiple property insurance, it is important to bear the following in mind:
There are several liabilities involved in owning more than one properties that may not be immediately obvious to the layman. Therefore, is expedient that the landlord finds certified insurance agents who are familiar with the terrain of the multiple property insurance industry, so that they can obtain policies that are suited to the liabilities associated with their various properties.
The insurance coverage requirements might change periodically, especially in cases where properties are renovated or upgraded structurally. It is necessary that the terms of the coverage should be reviewed at these points so that the policy can be amended accordingly before each new term year. This helps the landlord avoid oversights that could become problematic in future or lead to legal issues in case there are any damages. Note however that these term reviews might cause the insurance premiums to rise or fall, depending on what is done to the properties.
The rental properties are in a constant state of being occupied or being vacant, at various times during the year, especially where short term leases are concerned. The landlord needs to ensure that the multiple insurance policy that he or she takes out includes unoccupied coverage, and it should be deemed with a blanket limit. This means that when one of the buildings is damaged, the insurance coverage on all the properties can be allotted to cover the damage on the one random building. For example, a property owner has four buildings which have a single policy of $1 million. If one or two of these buildings has any applicable damage, the coverage should be allotted to cover it. Policies that have limits on the coverage based on which of the multiple buildings is damaged usually tend to cause insurance claims to be very chaotic and can even lead to a denial of the claim.
This may seem very obvious, but it is better to be crystal clear: a landlord with multiple properties should make sure that all his or her properties are included in the policy. The reason for saying this is that some property owners might think they should not include some properties because they are in a different location or have different valuation in the real estate market or are currently unoccupied. It is always a great move to protect all the properties under the landlord’s portfolio in one multiple property insurance policy. It does not matter whether the property has been vacant for a prolonged period, or whether it is of a very different use.
A multiple insurance policy will make life a lot easier for you as a landlord when it comes to managing a portfolio of properties. Instead of worrying about keeping up with several policies, speak to your agent about consolidating everything into one place.
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