If you’re a landlord who has struggled with the question of rental insurance for your property, you aren’t alone. Insurance can provide protection and peace-of-mind, and it can help you protect yourself from bad tenants. However, it will also cut into your bottom line. Insurance that provides the protection you need is going to cost what it is worth.
Before you make a decision to begin insurance or to try going without it, you should consider the options you have. Here are some ways you can manage your insurance as a landlord…
Your options for insurance coverage for rental properties
You should have insurance policies to cover the structures that you own, and any property that you have inside them. Liability is particularly important for landlords because injuries on a rental property can easily turn into medical lawsuits against the owner of the property (you). You also want a policy that can cover the cost it would take to re-enter the rental market if the unit was destroyed in a disaster or fire.
You can and should use the lease agreement to require that your tenants purchase their own renter’s insurance. This is a separate form of insurance from what landlords carry. In any case where the money would need to be collected from the tenant (for example, if direct negligence on their part resulted in the fire), making them carry this insurance gives you an extra layer of protection.
How to protect yourself from bad tenants
Insurance is an important protection, but you can reduce the chance that you ever need to rely on it by taking your application process very seriously. The best way you can protect yourself is by choosing responsible renters who have a history of being able to meet their commitments and take care of their properties. For this reason, you should always do the following before renting:
- Complete criminal and credit check (property management companies can handle this for you)
- Verify that the tenant is required to obtain renter’s insurance in the lease agreement
- Verify that inspections are built into your lease agreements to ensure compliance
- Prepare drafts of notices to cease so that you can respond immediately to behavior that might damage the property.
Talk to a lawyer about rental property asset protection
The perfect insurance solution for any landlord is going to depend on their personal circumstances. If you’d like to talk about asset protection solutions for your rental business, you can talk to our lawyers. We offer a wide range of legal services that meet the needs of landlords. Additionally, we offer experienced property management in New Jersey.
To begin, please contact us for a consultation.