Knowing the difference between homeowners insurance and property insurance may save your life — as you know it.
Consider this: 35.8% of landlords fail within the first five years of business. Today, inflationary pressures are fueling an alarming rise in evictions. Faced with surging property taxes, insurance, and maintenance costs, landlords are raising rents. But the average renter can’t absorb the costs.
It’s every landlord’s nightmare when an angry tenant fights eviction. The specter of mounting legal bills, lost income, and sleepless nights is very real. You worry about threats and vandalism. You’ve heard horror stories about broken pipes, razor-damaged carpets, sabotaged appliances, and sledgehammer-damaged walls. You wonder, “Will my homeowners’ insurance cover intentional damage or vandalism to a property I’m renting?”
If you’re looking for real answers today, we have you covered.
Rental Property Insurance Versus Homeowners Insurance in Boca Raton: What’s the Difference?
At their core, landlord and homeowners insurance protect the main living structures on a property.
However, it’s important to know that a standard homeowners insurance policy provides only limited protections for a property that isn’t your primary residence. This type of policy focuses on covering owner-occupied dwellings.
If you don’t live on the rental property, you may be legally required to purchase rental property insurance (also known as landlord insurance). This type of insurance covers non-owner-occupied dwellings.
In addition, rental property insurance addresses specific landlord challenges, such as vandalism, burglary, and loss of rental income.
The Ironclad Protection Rental Property Insurance Provides
If you live in one of the units in your multi-family building or currently rent out a room in your home, a customized owner-occupied homeowners policy may be all you need. However, some circumstances may require additional coverage in the form of rental property insurance. This is coverage that umbrella policies don’t cover.
Location, Location, Location
If you own a property in an area prone to natural disasters such as floods, rental property insurance may be a wise investment. Generally, homeowners’ policies don’t offer coverage for flood protection.
Although property crime has declined in recent years, estimated losses amounted to $15.8 billion in 2019 alone. In that year, 6,925,677 property crime offenses were committed.
As mentioned, tenants who engage in vandalism or arson can cause extreme upheaval in your life. Aside from investing in superior tenant screening services and having the right pre-screening process, a customized rental property policy is your best protection. It can offer critical coverage for repairs and replacements if your property is vandalized or burglarized.
Legal Protection From Tenants or Third-Parties
Did one of your tenants fall on the damaged driveway and sustain injuries? If so, a rental property policy can help cover the cost of legal fees in case of a lawsuit, which can easily run into tens of thousands of dollars.
In the United States, most landlords (14 million) are individual investors who own just a few properties (1-4 units). Legal bills can make or break your business.
The Loss of Rental Income
When a dwelling becomes uninhabitable due to a building fire or natural disaster, the right policy can provide rental income reimbursement to cover your losses.
Welcome Airbnb Guest — Just Don’t Break My Big-Screen TV
In recent years, Airbnb has skyrocketed in popularity among property owners. The United States vacation rental industry, valued at $15.1 billion, is the most lucrative worldwide. By current estimates, more than 600,000 property owners have used the Airbnb platform to rent out condos, apartments, rooms, and homes.
Recently, you decided to take the plunge. You made your listing more attractive by offering guests a tantalizing breakfast of waffles, eggs, sausages, fresh fruit, and croissants every morning. Your bookings increased, and profits soared.
However, during a rather enthusiastic evening party, one of your Airbnb guests broke your 80-inch AI-powered TV and prized Hermès vase. The right rental property insurance covering short-term Airbnb-style rentals would have provided adequate coverage — and peace of mind.
The Top 5 Questions to Ask When Shopping for Rental Property Insurance
Reading the fine print of any policy you’re considering is essential. In addition, it’s important to ask your insurance agent the right questions:
- How does your quote compare to that of your competitors?
- Will I receive a discount for making quarterly or annual premium payments?
- Do I have to pay my deductible before the insurance company pays for any claims?
- Does my homeowners’ policy offer enough coverage?
- What multi-policy discounts are available to me?
When shopping for rental property insurance, look for an insurer that offers discounts for bundling rental property insurance with your existing homeowners’ insurance policy. In addition, your policy must cover all the risks a standard homeowners policy doesn’t offer.
No Compromise: Finding an Insurance Policy That’s Both Affordable and Effective
There are many benefits to investing in rental property insurance in Boca Raton, FL. The most obvious is that it provides peace of mind knowing that you have premium coverage in the face of vandalism, natural disasters, and lost income.
If finding good insurance sounds like a lot of work, we understand. At The Gordon Agency, we’ve been helping residents of South Florida find extensive property and homeowners’ insurance for years.
Our experienced insurance agents can help you obtain the coverage you need for both owner-occupied and non-owner-occupied properties. We offer you a distinct advantage because we have access to multiple carriers. Our secret is that we compare coverages and quotes to get you the best deal possible.
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