The top function of your rental business should be to make money for you, not give it away. One way to protect your investment and your financial health is to have proper insurances in place. Having lots of insurance is good, but having the right insurance is best. Make sure to ask your insurance broker about the details of home insurance in Newark, DE, but in general, here are a couple of insurances that you should consider.
When it comes to insuring personal rental properties, having a landlord policy on each rental unit you own is important, whether that unit is paid off or not. Landlord policies have the added bonus of additional liability protection for the landlord. You will also need to check with your home insurance broker to ensure that each policy carries sufficient coverage to satisfy your mortgage lender.
Depending upon your rental’s geographic location, there are some additional property insurance policies you may want to consider. For example, in California, many people have earthquake insurance. In areas with high annual rainfall, you may want to investigate flood insurance. Your home insurance broker can advise you on the particular hazards you might wish to insure against in your area.
An umbrella policy acts as an umbrella over your other existing insurance policies. An example of when this coverage is relevant includes when a guest of your tenant is injured in a slip and fall on one of your rental properties. Another example is when a neighbor’s property is damaged by a tree falling on it from your property. Your landlord insurance policy will have a liability limit, but the umbrella policy covers liability after that limit is exhausted.