Without a doubt, Colorado Springs rental property owners need good quality insurance to protect their real estate investments. Nonetheless, there are many different kinds of insurance, each with its own coverages and limits. That alone can make identifying which insurance you need quite a predicament. Landlord or Investor insurance, landlord liability, umbrella, and flood insurance are just a few examples of what’s out there. Since different types of insurance are designed to protect different things, understanding well what purpose each can give 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 purposely drafted to protect 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, which is why most landlords require that their tenants purchase their own renter’s insurance policy and sometimes tenant liability insurance on top everything else.
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 intended not only to protect your rental home but also the financial aspects of your investment as well.
An umbrella policy is exactly 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. Because being landlord suits both of these categories, it is worth checking 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.
Keep in mind, however, 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 Colorado 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. Regardless if it is 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 vital to examine your coverage amounts cautiously and make sure 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 Colorado (719rent), 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 719-471-7368 for more information.
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