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Asset Protection & Insurance: Is Your Altamonte Springs Rental Property Covered?

Filling Out Insurance Paperwork with a Model House in the ForefrontWithout a doubt, Altamonte Springs rental property owners need good quality insurance to protect their real estate investments. You just can’t predict what happens to your property; sometimes— hopefully never— disaster strikes. That’s why it is important to have insurance. Although, there are many different kinds of insurance, each with its own coverages and limits. That can make distinguishing which insurance you need quite a difficulty. Landlord or Investor insurance, landlord liability, umbrella, and flood insurance are just a few examples of what you can buy. However, don’t let the complexity of making the decision scare you off. Insurance is necessary because, like a fire extinguisher, when you need it, you REALLY need it. Now, since different types of insurance are designed to protect different things, understanding what purpose each serves can help you work out how to best protect your rental property assets with the correct type and amount of coverage.

Unlike homeowner’s insurance, Landlord or Investment Property Insurance is intended to safeguard investment property. This type of insurance covers the rental home and usually exterior features, such as sheds or fences. Landlord insurance does not cover your tenant or your tenant’s personal property. This means that if they have jewelry or any items of high value that were destroyed, it wouldn’t be covered. This is why most landlords ask that their tenants purchase their own renter’s insurance policy and sometimes tenant liability insurance too.

Landlord Liability insurance is different from Investment Property Insurance but is often included. This is due to the fact that this type of insurance covers losses related to damage, theft, or vandalism caused by tenants or their guests; it also covers liability in the event of an injury. This type of insurance is aimed not just to uphold or protect your rental home but the financial aspects of your investment, moreover.

An umbrella policy is just what it sounds like: broad coverage for a rental property that adds an extra layer of protection for individuals who own property or have an occupation that is prone to lawsuits. Considering being a landlord meets both of these classes, it is worth examining an umbrella policy to protect your assets if you are sued for damages in excess of your other insurance policies. These policies also typically protect the insured against loss of rent or damages to other people’s property or injury caused by others, such as a tenant. It also protects against libel, vandalism, slander, and invasion of privacy.

To understand how umbrella insurance works, consider this scenario. Your tenant breaks their leg on the property and sues you for $300,000. Your insurance may cover, for the purpose of this example, up to $100,000. Now, you still have to pay for the remaining $200,000 out of your own wallet. This is where the umbrella insurance policy comes in. The coverage it offers is on top of the limits of your other insurance. That means it pays the $200,000.

It is worth noting, still, that even an umbrella policy usually does not cover losses to your rental property due to a flood. For many reasons, flood insurance is usually offered as a separate policy that must be purchased through the National Flood Insurance Program (NFIP). This type of insurance typically covers the actual cash value (not the replacement cost) of the physical structure of the home and a detached garage, if any. While many Altamonte Springs property owners think that they don’t need flood insurance because their property is not located in a “high-risk” area, the truth is that floods can and do happen anywhere, and often strike without warning. Whether from a burst pipe or an unusual amount of rain, floods damage and destroy homes on a regular basis.

With so many different types of insurance, it’s crucial to examine your coverage amounts thoroughly and ensure that you are not paying for insurance you don’t need, but also that the insurance you do have provides the right amount of coverage. Still, knowing whether you have the right insurance coverage can be quite tricky unless you have reliable industry experts on your team. At Real Property Management Verita, we can help you determine how to best protect your valuable properties and your financial well-being with the right insurance coverage. To learn more, contact us or call us at 321-972-6823 for more information.

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