The Cost of Getting Landlord Insurance
Posted on June 29th, 2011
Getting a landlord insurance policy should be at the top of your list once you decide to have you property rented out. Landlord insurance offers homeowners the protection and coverage which is important if you are placing your valuable investment, or your property, in the hands of a tenant. However, you should not just get the first landlord insurance policy that you come across with in the market. To help you out in making sure that you would be getting one with the coverage and rate you are looking for, it would greatly help if you know how to estimate the cost of getting a landlord insurance policy.
The first thing you need to do would be to estimate the value of the property you are planning to rent out. It is recommended that you get this professionally done, although getting an estimate using the mortgage that you have can also be a good estimate. Make sure that any improvements done on the property would also be factored in the estimate you would be making.
You then need to decide whether you would be taking out an actual cost insurance policy or a replacement cost insurance policy. You need to note that although replacement cost insurance is more expensive, it would be the better option particularly if the property you would be renting out has a high value since you would be covered for the actual replacement cost of the item that was damaged whereas actual cost insurance would only cover the depreciated value of the item based on its acquisition cost. Many insurance companies today do not offer the option to get a replacement cost insurance policy for homeowners with older homes or properties located in lower-valued areas because of the cost of the property is often significantly lower than its replacement cost.
Depending on your coverage needs, you may also choose to add other benefits to your policy. For instance, you can get liability insurance or an umbrella policy to cover you from potential liabilities as well as loss of use insurance that would compensate you during the months when you are not receiving rent because your property is still being renovated or repaired.
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Tags: Insurance, Landlord Insurance
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