Tips For Buying Investment Property Insurance
If you have decided that it's time to purchase an investment property, one of the biggest decisions you'll have to make is how you plan to insure that property. Purchasing investment property insurance slightly more complex than the homeowner's insurance you've bought before. Here's a look at a few of the things that will directly affect your investment property insurance premiums.
What Will The Property Be Used For?
The purpose of the property is an important consideration when you're dealing with investment property insurance. You'll need a different type of coverage for a rental property than you would need for a retail or commercial facility. Similarly, properties that will spend a significant amount of time vacant are going to be rated differently than those that will be occupied on a regular basis.
What Will Your Role Be?
Another important consideration for your investment property insurance is what your role will be in the property. If you will be renting it out as a residential property, you'll need a landlord/tenant policy, and you'll have more complex risk factors if it is a multi-family property. The more people you have on the property, the greater the risk for problems, including parties, liability issues, and even fire damage.
Additionally, if the investment property will be a commercial facility, you'll have to consider public access risks, potential industrial threats, and more. All of these risk factors will affect your policy premiums and the coverage options provided to you, so make sure that you are clear with your insurance company about the purpose of the property so that you get the coverage you need.
What Additional Protections Will You Need?
If your investment property will be a source of rental income, you should also talk with your insurance company about additional protections to help preserve this income source in the event that there's a claim that results in lost rental income. Rental value coverage can do just that. It will provide you with a fair rental rate for your property in the event that something happens to render the property unusable. This could be the difference between making ends meet and financial disaster if you face a loss.
These are a few of the important considerations for insurance protections on an investment property. These properties require a special approach to ensure that you get the protections that you need. Contact an investment property insurance agent for more information.
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