Use Landlords Contents Insurance To Protect Rental Properties
A common concern for landlords, investment property managers, and real estate investors is how to protect their properties from damage and theft. One of the most obvious ways to do this is with landlords contents insurance. Even though insurance can be somewhat of necessary evil, most experience investors can recognize the value of this type of coverage. Insurance, despite not always being used, can provide a significant amount of comfort and peace of mind to the policyholder.
Contents insurance for landlords is designed to protect the landlords personally owned contents. This can include such things as lighting fixtures, hardware, furniture, appliances, and other items included in the rent of the property. Depending on the contract, it may also cover items in the yard of the rental property such as fences, sheds, Jacuzzis, etc.
For some investors landlord's content insurance is not the only option however. Many landlords choose to forgo this type of insurance in lieu of other protections. A common way to cover the cost of damage and theft to rental properties is to simply write damages into the tenant's contract. A deposit for rental is second nature and required almost everywhere nowadays. In many contracts, any damages that would typically be covered by landlords contents insurance, is instead covered by the deposit made by the renters.
Using the deposit may be a good alternative if your property is in a low risk area or if you are not overly concerned about rental properties furnishings. If your investment property has expensive furnishing, artwork, hardware, or other included additions, you may want to supplement the security deposit with a degree of landlords contents insurance protection.
Just because you write into the contract that the renter is responsible for damage and theft to the rental property does not mean that they will pay it. In fact, as a result of the renter not having any ownership responsibility to your property, many will be inclined to get out of paying however they can. This boils down to you only getting paid back for the portion of the damages that can be covered by their security deposit.
In most cases, it is wiser to leave the security deposit in place in order to cover other unexpected happenstances with your renters. Those of you that have dealt with investment properties for any amount of time have inevitably been stiffed by a renter. It is not uncommon for a renter to skip out on their contract or last month's rent, keeping their security deposit in these cases may be quite sensible.
What it all boils down to is that landlords contents insurance can be a very good way to protect your properties from loss. Make sure when purchasing your contract that you take time to shop around for what you need from it. Each property is different and may require coverage of different things. Insurance contracts are not created equal. The insurance shopping process is critical to matching the right insurance to your rental property.
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