What are the Basics of Rental Property Insurance?

Overnight Rental Insurance: How to Prepare Your Home for VacationersAs most property owners are aware, renting out your home can be both lucrative and stressful. Since simply putting up a “For Rent” sign isn’t enough to ensure your home is taken care of; there are a few guidelines for homeowners to follow to protect themselves. Before your new tenants move in, be sure to instill a Tennessee Rental Property Insurance plan to protect your property and your assets.

Appliance & Property Coverage- Regardless of the type of property you rent out, the property itself needs to be insured.  Although the individual furnishings are the renter’s responsibility, it is wise to ensure stationary items such as appliances that will not leave with the tenants. For example, these items can include the refrigerator, dishwasher, washer, dryer, and stove. Estimate how much it would cost to replace all of them simultaneously and get a policy for personal property that will cover at least that amount.

Rental Income Protection- In the event your property becomes unlivable, this coverage can provide payments to make up for the loss of rental income. If this money is your main source of income, it is advised that you decipher how much you make per year in rental payments and request insurance for that amount to provide a cushion.

Bundling Insurance- Insuring your home and your car with the same company can provide a more affordable rate, so take advantage of those offerings! To keep more money in your pocket, consider a higher deductible. This way, you will save money on your insurance and have more monthly revenue. What’s more, House Logic reminds you that the expenses and time required to maintain the property is a tax write off, saving you money in the long run.

Cash Value vs. Replacement Cost Insurance- Cash value insurance will only provide enough money to repair your property to its previous state before loss, including depreciation. This policy costs less but you may be required to pay more out of pocket to properly fix an item. However, full replacement insurance costs more but will replace the item for you, saving you money by decreasing out of pocket expenses.

Injury Liability- Any incident caused by the tenant’s negligence will be their responsibility. However, any grey areas should be addressed with your insurance expert to make sure you have enough coverage to protect against potential scenarios.

In order to protect against potential loss and damage to your home, it is imperative you find a suitable tenant. Although easier said than done, getting to know your potential tenant and ensuring he or she doesn’t have a litigious history, doesn’t make petty claims, and takes care of their property are all characteristics to be aware of. At Barnes Insurance Agency, we specialize in providing insurance solutions for property owners like you.  To learn more about our offerings, contact us today at (866) 733-5424.

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