Rental Properties Insurance - Investor 0053 Multiple Ways You Can Purchase 5 months ago   04:40

Rental Property Insurance Is Essential For Your Real Estate Rentals. Here's What You Need To Know About Insuring Rental Properties...




Hi, this is Frank Chen with, the only site you need as a real estate investor. Today I've got quick video on rental property insurance.

Intro to Rental Property Insurance
The type of insurance coverage landlords need falls under the umbrella term "property and casualty insurance". We also encourage Landlords to look into Liability insurance, which i'll cover a bit later in the video.

Homeowners insurance mainly focuses on the coverage for the contents of the house, as a Landlord, you don't really need that. You need rental property insurance.

Rental property insurance policies are written for structures that are four units or less. Anything above that, becomes a commercial risk, which requires a commercial policy..

The policy is written as a package policy, meaning that it covers a number of what insurance companies refer to as "perils." These are things like...
- Fire, Hail theft, tornado, hurricane, wind, and water.
- Also covers detached structures on the property like a garage or a storage shed.

Important to have the appropriate rental insurance
Insurance companies assume... (some items require liability insurance in order to be covered)
- the risk for damages to your property
- Covers you against any injuries or accidents that may occur (Note: The Landlord is liable if he is negligible. So anything, that you as the landlord are supposed to fix, if it causes injury or an accident, you are responsible.)
- Covers legal fees
- Loss of rents
- Tax Deductions -

Note: What is listed is not guaranteed for all policies.

Limitations when insuring rentals
- Fire - only landlord property is insured, not tenants
- Limitations on what contents can be insured?
- Clauses for theft
- Does not cover earthquakes - separate policy
- Flooding - natural disaster

Note: Just be sure to consult with your real estate insurance agent on the specifics behind your policy and the limitations.

Selecting an Insurance Company for Rental Insurance
- Price is important - avg $800 for the year
- Legitimate and creditworthy
- Contact state's insurance department to make sure the company is licensed
- Financial strength - Moody's standard & poor's
- Ask for referrals - proven track record
- Check out
- service reps
- speed with which the claims are appraised,processed and paid
- overall satisfaction

To reduce risk
- Insist that your tenants acquire renters insurance - low cost policies
- Periodically, make sure the fire extinguisher is working and the tenant knows where it is
- Show the tenant where the main water valve is, AND how to shut it off.
- Semi-Annual inspections - also check air filters

As a real estate investor, Landlord, it is your responsibility to protect your real estate investments. Especially, when you have tenants. Not every property will need the most expensive coverage, so before spending several hundreds, or thousands of dollars on rental property insurance. Take the time to educate your tenants, and research for the best type of policy or coverage for your real estate investment.

Again, this is Frank Chen with Please take the time to leave your comments for this video below and please subscribe to our YouTube channel so you'll be automatically notified when we upload more quick video tips for you. Take care and good investing.

Comments 45 Comments

Variety Flavors
Thank you for the info. My question is $800 / yr for how many units?
Curt Smith
Adding some premium tuning helps you won't see other places. rental insurance is a very frustrating product if you find that the premium quotes are too high, or you are getting increases and you start to dig into how to tune your coverage thus the premium. A lot of confusing terms; like "co-insurance"... Here's some comments:

- ACV actual coverage value; IE you buy a rental for $100k, the agents replacement cost calculator is extremely rigged for insane costs comes up with replacement cost at $200k. Real example. This is crazy, yoiur $100k included $20k for land, the insurance calc for replacement cost BSs us owners with a number that we think may be reasonable, but the $200k is just for the structure. No way a 1400sqft simple house takes $200k to rebuild. I go with ACV at 80% of zestimate.

- Deductable: go as high as possible $5k at least. But if you have a bank loan they want less then 3% deductable which for $100k house means $2500 deductable.

- Liability get the highest they offer.

- This is big; there are insurance co's that do not inspect. Its true, some who cater to landlords exclusively do not inspect!!! If your ins co inspects and mails you a Drop Letter, dump those guys and find a carrier that does not inspect. The national brands are tuned for Occupants not landlords. In the end I predict you'll move all your rentals to a "blanket" style insurer who is tuned for big time landlords. No inspection, monthly ACH auto billing etc all the conviences that running a real business needs. American Family offers $2M liability but the others are mainly a PIA.

- If you have a bunch of rentals in cash, no loan and escrow paying the insurance, you do not want a bunch of $1k insurance payments all coming out at the same month. Monthly auto debit is the way to go for a bunch of cash owned houses!!

I'm hearing from new landlords buying rentals in my REIA that the national carriers are upping their new policy underwriting to much MUCH higher premiums. Your only recourse is to move from RCV replacement cost to ACV actual cost and YOU pick the insured amount. Drop loss of income (rent) and up deductable, but always max out their liability offered. Dump a carrier that does not offer $1M liability.

Insurance is not a take it or leave it number. Theres alot you can tune if you are only helped by the agent.... Today there's up to a 2x variance between carriers. Hard to believe one quoted: $1995, another $920.... Just crazy.
Very informative!!! Thank you.
E Salinardi
Excellent!!! Very informative, short, and to the point. Thank you
Yak Motley
Thanks for this video! New sub!
Arnie B.
My tenant accidentally burned down my rental house in the 3rd month of the lease, can I use there deposit money for the deductible????
Fabiola Francis
lots of information. thanks.
Poizon Williams
Awesome videos! Thanks for taking the time to share this information! I love how your videos are super quick, simple, easily understood, and to the point. You are Great!!!!!!
David Cohen
Good video. Thanks for the info
Andy l Willis Wireless
, don't see
Love the video and subscribed} A question how much of a impact $? does double plated hurricane window proof along hurricane shutters have on a insurance policy!? Thank you.. 👍 🏢
I have having issues getting insurance Fire Policies on my properties because they want the policy attached to a main residence and then they only will cover so many rentals so I need insight on how to fix this issue so I don't have uninsured properties and i can continue to grow.  Each house has to have its own insurance policy so
David Fletcher
what do you think about Safeco?
Kalim C
You are speaking so fast it's confusing!!! Slow down! I feel like I've been swindled by a conman after watching this whole thing!! I need a cigarette!
Tuk Chamberlin
This is great knowledge. You covered so much in 3 min. I will check around before I purchased the insurance. Thanks
Good info.
Claims Delegates
Funny, I just uploaded a video talking about a recent experience I had when a landlord had kept his old HO-3 policy in place when he rented out his house. He had some serious coverage issues that wouldn't have existed if he had the correct policy in effect.
After my video plays, YouTube recommended THIS video.
Good stuff sir.
Say less, mean more.
Dan O'Donovan
Mustafa - just saw this. Please let me know if you are still looking for renters insurance. I am a licensed insurance broker that can help you out.
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