Insurance, Liability & Risk

[Kim Gray]

Happy Thursday everyone. Three more observations from the self-managing side of rental property.
 

Three Landlord Tips

1. Homeowners insurance may not provide adequate coverage for a rental property.
Once a property becomes a rental, your coverage needs may change significantly. Some policies limit or exclude rental activity. Know what your policy actually covers before you need it.
2. A pet agreement is not the same as a pet policy.
A verbal understanding is difficult to enforce. A written pet agreement documents the approved animal and the tenant’s responsibilities. If it matters, put it in writing.
3. Wear and tear is not the same as damage.
Normal aging — scuffed floors, faded paint, small nail holes — is a cost of ownership. Actual damage — carpet burns, broken fixtures, holes in walls — is the tenant’s responsibility. Misclassifying one for the other is one of the most common reasons landlords lose deposit disputes.

 Two Things To Think About
• The cheapest landlord mistake to prevent is often the most expensive one to fix later.
• Documentation is not paperwork. It is protection.

 One Question
What is one insurance or legal mistake you see new landlords make repeatedly?
Looking forward to hearing your answers.

[Drew Sygit]

Many insurance companies that primarily focus on owner-occupied policies, that also offer landlord policies, have a sneaky clause in their policies that allow them to deny claims after a rental has been vacant for more than 30-days.