As a Boca Raton landlord, you’re required to provide a safe and habitable home for your tenants. You also have an obligation to protect your investment and yourself. The best way to do this is with a robust insurance policy.
If you’re renting out a property that was once your primary residence, you need to switch your insurance policy to a landlord insurance policy. Today, we’re talking about that requirement and some other coverage you want to make sure you have.
Landlord Insurance vs. Homeowner’s Insurance
The main difference between your landlord insurance policy and the homeowner’s insurance policy you have on the home you live in is that your landlord policy covers the structure of the home and the costs to repair and replace it. However, it doesn’t cover any personal belongings that aren’t yours. When you live in a home, your insurance covers the structure and all your belongings. But, with a landlord policy your home is covered, but not the tenant’s personal items.
For this reason, we strongly recommend you require renter’s insurance of your tenants. For a minimal cost, your tenants can get a lot of coverage which will protect them in case of loss. If a fire sweeps through the property, your insurance policy will cover the loss. But, your tenant’s electronics, clothing, and furniture will not be covered. Make sure they understand that and insure themselves.
Landlord Insurance and Liability
A good landlord insurance policy will also have higher liability coverage than your average homeowner’s policy. This is important, because anything can happen when tenants are living in your property. Talk to your insurance agent about the required or recommended liability limits. If something happens and you’re sued, you want to be protected.
Loss of Rent Coverage
It’s important to cover yourself in case you have to move your tenant out of the property. Suppose there’s a tropical storm that tears the roof off your home or the air conditioning dies during a south Florida summer and there’s a delay in getting the new system installed. Your tenants will not be able to stay in the home, which means you may have to put them in a hotel. If they can’t live in the property for an extended time, you’ll lose a lot of rental income in addition to paying out of pocket for costs like hotel bills. If your landlord policy doesn’t already include loss of rent coverage, consider adding it.
Additional protections are always available when you’re buying insurance for your rental property, and you should consider them carefully. Flood insurance is an important thing to include in Florida, and it’s required in many Boca Raton neighborhoods. Many landlords are now buying insurance policies against bed bugs.
An important thing to remember is that insurance premiums are tax deductible. We don’t think it’s ever a good idea to be cheap when it comes to insuring one of your most valuable investments. If you don’t have a reliable insurance agent, let us know and we can make some recommendations.
If you have any questions about insurance for your rental property or your requirements as a Boca Raton landlord, please contact us at Domu Properties. We’d be happy to serve as your Boca Raton property management resource.