Do You Need Investment Property Insurance?

While looking for a rental property to purchase, you might have come across the term “investment property insurance.” Although it may sound similar to standard homeowner’s property insurance plans, there is more to MD investment property insurance than meets the eye.

Investment property insurance covers the risks associated with owning and renting a house for extended periods. Also known as “rental property insurance” or “landlords’ insurance,” it is a feasible option for landlords who want to protect their property and its contents from potential damage. Investment property insurance also covers owners for claims by third parties who are injured on their property.

What does investment property insurance cover?

Investment property insurance is similar to other types of insurance in that it offers different kinds of coverage. In most cases, you have the option to choose the type of coverage you will receive depending on your needs.

For example, if your rental home is located in a flood-prone area, you could spend more on flood insurance. If you rent a furnished house or apartment, you could opt for insurance covering the cost of the property’s contents.

Property insurance

Investment property insurance protects your investment property from losses resulting from natural phenomena. Under the terms of the policy, your insurance provider will pay for damages caused by a disaster. These plans cover losses caused by flood, fire, earthquake, hurricane, and other hazards that may affect the property.

You should also get coverage for human-made damages that could affect the value of your investment property. There are cases where tenants intentionally or unintentionally damage the property, making it unattractive or uninhabitable to future occupants.

Standard homeowner’s insurance doesn’t usually cover losses or damage caused by tenants. In most cases, you will have to pay for the cost of repair or replacement out of pocket. This could end up costing you a lot of money. But if you have investment property insurance, you could get full or partial coverage for these expenses.

Contents insurance

Some investment property owners rent out their homes or condominium units with the furnishings included. This often makes the property more attractive to tenants because they save money by needing fewer things to move into the home.

If you plan on renting out your furnished property, it is advisable to obtain contents insurance beforehand. These insurance policies cover the cost of repair or replacement of items in the home that aren’t installed or fixed, including furniture and decorative objects. Contents insurance policies also cover the cost of carpets and curtains used in the rental property if they are stolen or intentionally damaged.

Loss of income insurance

Many rental property owners worry about losing income from a house or apartment that becomes uninhabitable due to a disaster. Even if your insurance policy covers the costs of repairing the property, you still have to deal with the loss of income for the next few months.

The good news is that rental income protection covers the loss of rental income due to tenants not being obligated to pay rent for the time being. This coverage applies to situations wherein the property incurs damage in an incident covered by your insurance policy, such as a flood or fire. The coverage from these plans is usually valid only for a limited period.

Liability insurance

Suppose an incident on your rental property causes damage or injury to another party. In that case, you are liable for the costs of repair of the property and the medical expenses of the injured individual. If you do not have investment property insurance, you may have to spend a significant amount to deal with the incident.

If you have investment property insurance, your tenant can claim compensation for an incident on your property. Your insurance provider will investigate the claim, and if you are deemed responsible, your plan will cover the repair or medical costs.

Get an investment property insurance today

Avoiding or minimizing loss is essential for gaining the most from your rental property. As the investment property owner, it would be beneficial to obtain investment property insurance as soon as possible. With a comprehensive property insurance plan, you can avoid the excessive costs resulting from damage or injury claims related to your property.

About Moody Insurance Worldwide

Moody Insurance Worldwide, a division of Moody & Associates that was founded in 1914, is a leading provider of risk management programs and insurance coverage to individuals and businesses across the East Coast. We write all sizes of businesses, with technical expertise in many key industry areas, and provide personal insurance programs for estates and high net worth individuals. Our licensed, experienced commercial account managers can work with you to determine the coverage that you need at a competitive rate. Contact us today at (855) 868-0170 to learn more about what we can do for you.