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Asset Protection & Insurance: Is Your Dripping Springs Rental Property Covered?

Filling Out Insurance Paperwork with a Model House in the ForefrontAll Dripping Springs rental property owners know that they need good quality insurance to protect their real estate investments. It’s really not possible to account and prepare for everything, so when tragedy does strike, it’s good to be insured. However, there are a lot of different kinds of insurance, each with its own coverages and limits. That can cause selecting which insurance you need to become quite a real issue. Landlord or Investor insurance, landlord liability, umbrella, and flood insurance are just a few examples of what you can get. However, don’t let the huge number of choices give you the impression that it’s too much work and you’d rather skip it. Because, the thing with insurance, it may feel like an unnecessary expense at times, but when you need it, you really really need it. Now, since different types of insurance are designed to protect different things, knowing what each plan offers can help you figure out how to best protect your rental property assets with the correct type and amount of coverage.

Unlike homeowner’s insurance, Landlord or Investment Property Insurance is meant to safeguard investment property. This type of insurance covers the rental home and usually exterior features, such as sheds or fences. Landlord insurance does not cover your tenant or your tenant’s personal property. So, if the tenant bought an appliance and that gets damaged, it wouldn’t be covered. This is the reason why most landlords request that their tenants purchase their own renter’s insurance policy and sometimes tenant liability insurance also.

Landlord Liability insurance is different from Investment Property Insurance but is often included. This is because this type of insurance covers losses related to damage, theft, or vandalism caused by tenants or their guests; it also covers liability in the event of an injury. This type of insurance is intended not only to protect your rental home but also the financial aspects of your investment as well.

An umbrella policy is really what it appears to be: broad coverage for a rental property that adds an extra layer of protection for individuals who own property or have an occupation that is prone to lawsuits. Given that being landlord suits or fits both of these classifications, it is worth checking out an umbrella policy to protect your assets if you are sued for damages in excess of your other insurance policies. These policies also typically protect the insured against loss of rent or damages to other people’s property or injury caused by others, such as a tenant. It also protects you from vandalism and invasion of privacy— something that may happen to landlords. On top of that, it also covers slander and libel.

To understand how umbrella insurance can help you, think of this situation. Suppose your tenant slips and breaks a bone on your property and decides to sue you for $300,000, and they win. Your regular insurance covers, let’s say, $100,000. Now, who’s going to pay for the remaining $200,000? This is where the umbrella insurance can help you. It picks up after other insurance, covering the remaining $200,000.

It is essential to mention, nonetheless, that though an umbrella policy usually does not cover losses to your rental property due to a flood. For various causes, flood insurance is usually offered as a separate policy that must be purchased through the National Flood Insurance Program (NFIP). This type of insurance typically covers the actual cash value (not the replacement cost) of the physical structure of the home and a detached garage, if any. While many Dripping Springs property owners assume that they don’t need flood insurance because their property is not located in a “high-risk” area, the reality is that floods can and do happen anywhere, and usually strike without warning. Regardless if its from a burst pipe or an unusual amount of rain, floods damage and destroy homes on a regular basis.

With so many different types of insurance, it’s imperative that you examine your coverage amounts thoroughly and be satisfied that you are not paying for insurance you don’t need, then again, also that the insurance you do have provides the right amount of coverage. Furthermore, acknowledging whether you have the right insurance coverage can be quite mind-boggling except if you have reliable industry experts on your team. At Real Property Management Longhorn, we can help you determine how to best protect your valuable properties and your financial well-being with the right insurance coverage. To learn more, contact us or call us at 512-580-3099 for more information.

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