5 Common Mistakes When Purchasing Landlord Insurance
5 Common Mistakes When Purchasing Landlord Insurance
blog1.jpg

Jan 25,2024

5 Common Mistakes When Purchasing Landlord Insurance

Landlords play a crucial role in the housing market by providing rental properties to tenants. However, being a landlord comes with various responsibilities, such as securing the right insurance coverage for your investment. Many rental property owners make mistakes when purchasing landlord insurance, causing costly consequences. As a professional property management company, 3 Options Realty can help you maneuver the coverage process to maximize profits without violating local, state, and federal laws. Here are five common mistakes to avoid when buying landlord insurance to protect your property and investments.

Not Updating Your Home Insurance Policy

The leading mistake landlords make is assuming that their standard homeowners’ insurance policy will cover their rental property adequately. This assumption can be a costly oversight, as homeowners’ insurance protects owner-occupied properties, not rental properties. If you have homeowners’ insurance, our property managers can help you update your insurance policy to a landlord-specific one, preventing financial losses during damage, liability claims, or rental-related issues.

Not Getting Adequate Loss of Rent Coverage

Loss of rent coverage is an essential aspect of landlord insurance that many property owners overlook. This coverage protects your income if your rental property becomes uninhabitable because of covered scenarios like fire or natural disasters. With adequate loss of rent coverage, you may cover mortgage payments and other expenses during property repairs. Ensure your insurance policy includes sufficient loss of rent coverage to protect your rental income during unplanned disruptions.

Not Covering the Full Replacement Cost of the Rental Property

Another familiar mistake landlords make is under insuring their rental properties by not covering the total replacement cost. While this might save on premiums, opting for actual cash value (ACV) coverage instead of replacement cost coverage can lower your compensation to rebuild or replace damages. Investing in replacement cost coverage gives you peace of mind, knowing you can fully recover the value of your rental property in case of a covered loss.

Not Having Enough Liability Coverage

Liability claims can arise from various incidents on your rental property, including accidents, injuries, or damage caused by negligence. Many landlords need more liability coverage, assuming a standard policy protects them. However, legal expenses and settlements in liability cases can quickly exceed policy limits. We recommend hiring a property management company to ensure tailored liability coverage that addresses the specific risks associated with rental properties.

Not Covering Your Personal Property

While your primary focus is insuring the rental property, remember to consider your personal property within the rental unit. Landlord insurance usually covers structural damage but may not extend to your belongings like appliances, furnishings, or equipment you provide for your tenants. Failing to include coverage for personal property can cause significant out-of-pocket expenses if your items are damaged or stolen.

If you are a rental property owner and want the right landlord insurance, contact us at 3 Options Realty to protect your investment and financial well-being. Our property managers work with you to avoid these common mistakes. By taking this proactive approach, you can minimize potential risks and enjoy peace of mind as a responsible landlord.

Recent Blogs

small1
Feb 17,2024
A Guide to Accounting Records…

Owning rental property can be a lucrative investment, but…

Read More
small1
Feb 08,2024
What Is Included in a…

Property management usually comes with many responsibilities, requiring efficiency…

Read More
small1
Feb 01,2024
How to Write a Lease

As a landlord, one of your responsibilities is crafting…

Read More

Landlord Options

small1
Owner Portal

In appreciation for your continued patronage, we are pleased to offer you a management fee rebate equal to 2 months of management fees for any…

Read More
small1
Leasing & Management

If you are interested in professional property management services, you probably have some questions about the process and we have a few questions we…

Read More
small1
Rent Disbursement

Standard Rental Proceeds Disbursement Policy. It is the standard policy of 3 Options Realty to disburse monthly rental proceeds to property owners between the 15th…

Read More

We Are Ready to
Take Your Call

lander1

If you have been rummaging through web results for “property management companies near me,” then you are at the right place. 3 Options Realty’s property managers in Atlanta are experienced and trained to deliver top-tier service. Call 3 Options Realty to speak with a friendly representative today to learn more about our property management & real estate services. We are ready to take your call.

Buy, Sell & Rent with 3 Options Realty

lander1

We use professional market research to determine fair-market rent, and we use broad market advertising to reach a large audience. Our agents will also help you prepare your property and skillfully present your property. Prospective tenants will undergo comprehensive interviews and background screening before we negotiate with them the rental agreement using our proprietary, attorney-reviewed forms.