Rental properties can be a lucrative investment. Because of their passive income with monthly rent as well as the year-over-year appreciation that real estate often yields, it’s a smart financial choice for many. However, with those benefits come exposures that require the proper multifamily dwelling coverages. These are the four essential coverages that landlords typically purchase.
Property coverage is necessary because natural and other disasters can happen any time and cause damage. Mortgage companies will also require property damage insurance to cover the cost to rebuild in the event of such a loss.
Landlords should also carry liability insurance to protect against lawsuits that can be brought by parties injured on the premises. This coverage usually includes the cost to defend lawsuits and pay damages.
Lost Rental Income Coverage
Investment properties are lucrative when all of the tenants are paying their rent. However, it’s wise to have coverage in the event that doesn’t happen since taxes, mortgage, and other payments still come due for the landlord even when tenants are not paying.
Many landlords choose to add umbrella coverage. This excess liability policy provides additional policy limits in the event the owner is sued and protects those assets from seizure.
Multifamily dwellings are a smart investment for many landlords. However, the best way to protect that investment is with the right insurance.