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Common Rental Property Insurance Myths

Common Rental Property Insurance Myths

As a rental property owner, you are vulnerable to some pretty unique risk exposures—and are required to take on a specific set of responsibilities.

Insurance happens to be one of the most important things we pay for, but hope that we never need to use. You know that insurance is critical, but how can you better determine what your real estate endeavor really needs? Below are some of the most common Rental Property Insurance myths revealed; by uncovering these typical misconceptions, we at ALMEA Insurance hope to help you gain a better grasp on the significant insurance issues applicable to your real estate venture:

  1. Buying a property under your personal name and using your homeowner’s liability coverage is fine…

There doesn’t seem to be a single good reason why an individual would want to tie their personal assets to the risks proposed by real estate investing. Rental properties truly require a separate insurance policy all on their own. Some of the risks you are exposed to as a rental property owner are drastically different from those you would experience as a standard homeowner—making the need for a detached, customizable Landlord Insurance policy a must—to help you protect both yourself, the actual property and any issues with your tenants.

  1. Hiring a “handyman” to do work on my rentals can help me save time…

If by saving time, you mean you don’t have to initially do the work, then possibly, yes this approach can save you time—but tread carefully and don’t allow yourself to get caught up in “fly-by-night” handyman help. Chances are that these types of quick-fix handymen probably don’t carry liability insurance or any form of workers compensation, putting the risk back on you—the property owner. Without the right Rental Property Liability Insurance policy, you could face legal trouble if the incident is serious enough. Keep in mind that even having a tenant mow the lawn for reduced rent can potentially expose you to liability issues.

  1. Cheaper is better…

If there is one insurance myth that couldn’t be farther from true, it’s this one. It’s true—you get what you pay for. The rental property business and being a landlord within it, is a significant undertaking and you need a true insurance expert to help get you the coverage you need. Working with an insurance agent who actually understands the nuances and regulations of the real estate and rental property arena is the best thing you can do for yourself and your liability. With a solid understanding of the rental property business and access to a variety of carriers, a knowledgeable agent should have no problem getting you comprehensive coverage that still fits your budget. Challenge your agent to get you the best value for your insurance, not necessarily the cheapest rate.

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