As a landlord, it is important to protect yourself and your property. One way to do that is by carrying the right insurance policies. However, according to property insurance carrier Just Landlords, there are many insurance mistakes landlords make that can end up costing them dearly. This article will discuss seven of the most common insurance mistakes landlords make and how to avoid them.
Mistake #1: Failing to Insure Your Property to Full Value
One of the most common insurance mistakes landlords make is failing to insure their property for the full replacement value. If your property is damaged or destroyed, you will need enough money to rebuild it. Make sure you know how much it would cost to completely rebuild your property and insure it for that amount.
Mistake #2: Not Getting Enough Coverage
Another insurance mistake landlords make is not getting enough coverage. Your landlord insurance should cover the cost of rebuilding your property and any damage to personal belongings or other structures on the property. It should also cover any loss of income if you cannot rent the property due to damage.
Mistake #3: Forgetting to Insure Common Areas
As a landlord, it’s important to remember to ensure all parts of your property – including any common areas. If you have a shared driveway, for example, be sure to insure it. Otherwise, you could be held liable if someone is injured on the property. This is just one way to protect yourself from potential liability claims. Insuring all parts of your property can help minimize your risk and safeguard your investment.
Mistake #4: Not Purchasing Flood Insurance
Floods can happen anytime, anywhere. They are one of the most common and costly natural disasters in the United States. According to the National Flood Insurance Program, floods cause an average of $8 billion in yearly damage. And yet, only about 12% of homeowners have flood insurance. If you live in an area prone to flooding, be sure to purchase flood insurance. This is not typically covered by landlord insurance, so it is important to get a separate policy. Flood insurance will protect your home and belongings from water damage and can give you peace of mind in knowing that you are prepared for the worst. Don’t wait until it’s too late – ensure you are protected against the devastating effects of a flood.
Mistake #5: Not Purchasing Earthquake Insurance
Earthquake insurance is another type of coverage often excluded from landlord insurance policies. If you live in an area that is susceptible to earthquakes, it is important to purchase this coverage.
Mistake #6: Not Reviewing Your Policy Regularly
One of the biggest mistakes landlords can make is failing to review their insurance policy regularly. Your property is likely to change over time, and as it does, your insurance needs will change as well. If you don’t keep your policy up to date, you could find yourself underinsured in case of a claim. So, review your policy at least once a year to ensure it’s still providing the coverage you need. By doing so, you can help to protect yourself from the financial consequences of an uninsured loss.
Mistake #7: Not Shopping Around for the Best Rate
Finally, be sure to shop around for the best rate on your landlord insurance. Rates can vary significantly from one insurer to the next, so it pays to shop around. By avoiding these mistakes, you can be sure you have the right coverage to protect your property.
Final Word on Insurance Mistakes Landlords Should Avoid
By avoiding these mistakes, you can help to protect your property and safeguard your investment. Make sure you are fully insured against the risks associated with being a landlord. If you have any questions about your coverage, be sure to speak with your insurance agent. They will be able to help you find the right policy for your needs.