Investing in real estate comes with all kinds of risk. There’s the risk of having tenants move out only to find thousands of dollars in damage left behind. There’s the risk of losing a home to a storm or paying out of pocket for a claim that was denied by your insurance company.
Protecting your investment property from damage should be a priority. Insurance can help, but you have to make sure you buy the right insurance.
Rental Property Insurance and Risk Management
As a rental property owner, you need a risk management process, and insurance is a good place to start.
You may find yourself needing to repair or replace your property after a catastrophic event. You may find yourself dealing with property damage after a wind storm, a fire, or a terrible tenant. There’s always the risk of being sued by a tenant in court, and you’ll need to defend yourself legally.
These are just some of the reasons that insurance is so critical.
Property insurance is mandatory. You need to be able to repair or rebuild your property if it burns to the ground. Make sure you have enough insurance on your property to cover the costs of building it again from the ground up. We recommend contacting your insurance provider to ensure that you have adequate coverages.
Note that this is different from the homeowner’s policy you have on your own home. A landlord policy will protect the structure and its systems, but not the personal belongings inside the home. That’s the tenant’s responsibility, and it’s one of the reasons that strongly encourage that you require your residents to carry renter’s insurance.
Licensed and Insured Vendors Protect Against Damage
Preventative maintenance will help you avoid property damage. You don’t want to cut costs when it comes to maintaining the home and protecting the condition of your investment. Deferred and unreported maintenance issues are ultimately more expensive than fixing the issue while it’s minor.
Work with licensed and insured vendors only. Allowing someone that you hired off the street to work at your property only invites liability and extra expenses. If a worker gets injured while repairing your home and there is no insurance in place of his own, you’ll be paying medical bills and additional pain and suffering damages for years. A repair may be made incompletely or incorrectly, causing further maintenance to be necessary.
Renter’s Insurance for San Diego Tenants
Renter’s insurance benefits your tenants because it covers their personal belongings. If a tree crashes through a window during a bad storm and their electronics are damaged, they’ll need renter’s insurance to cover the replacement cost. There’s also a liability element to renter’s insurance policies. If your tenant causes damage, your property insurance would cover it, but if it’s the tenant’s responsibility, they should be held accountable by paying for it with their own policy. This will keep your premium lower and your claim report clear.
One of the best ways to reduce the risk of property damage is to work with a professional San Diego property management company. Risk management is only one of the services we provide. We’ll ensure the condition of your home is maintained and its value preserved and enhanced.
If you’d like to hear more about how we can help, please don’t hesitate to contact our team at San Diego Residential Property Management.