All Mount Pleasant rental property owners know that they 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. However, it’s not as simple as walking into an office and asking for one. There are many different kinds of insurance, each with its own coverages and limits. That can make deciding which insurance you need quite a problem. Landlord or Investor insurance, landlord liability, umbrella, and flood insurance are just a few examples of what’s for sale. However, don’t let the number of choices overwhelm you. You must be insured. It’s like a fire extinguisher in the sense that, when you need to use it, you’ll be very glad you have it. Now, since different types of insurance are designed to protect different things, knowing what each plan offers can help you figure 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 meant to safeguard investment property. This type of insurance covers the rental home and usually exterior features, such as sheds or fences. Landlord insurance, however, does not cover your tenant or your tenant’s personal property. That means, if they brought in a television or a computer and that gets damaged, they 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 as well.
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 meant not only to protect your rental home but also the financial aspects of your investment as well.
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. 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. It also protects against libel, vandalism, slander, and invasion of privacy.
To better understand umbrella insurance is, consider this situation. Let’s say your tenant is walking around the house and slips and hits their leg on a step, breaking their bone. Then they decide to sue you, and for some reason, they are awarded $300,000. Your regular insurance covers, let’s say, $100,000. Now, who’s going to pay for the remaining $200,000? This is where the umbrella insurance can help you. It picks up where the other insurance leaves, covering the amount that’s over the max— the $200,000 balance.
It is quite interesting to note that even an umbrella policy usually does not cover losses to your rental property due to a flood. For various causes, 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. Although multiple Mount Pleasant property owners believe 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 usually strike without warning. At any rate, 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 prudently and be certain that you are not paying for insurance you don’t need, then again, also that the insurance you do have provides the right amount of coverage. Still, recognizing whether you have the right insurance coverage can be quite mind-boggling except if you have reliable industry experts on your team. At Real Property Management Distinguished Care, 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 828-342-9683 for more information.
We are pledged to the letter and spirit of U.S. policy for the achievement of equal housing opportunity throughout the Nation. See Equal Housing Opportunity Statement for more information.
