Insurance for landlords

Rental properties can be an good source of investment income, but they also expose the owner to potential for significant claims.   Landlords coverages vary widely from company to company; here are some issues to consider when reviewing your coverages:

Building Coverage: Can be written on a replacement cost basis or actual cash value basis. A few companies are now offering market value. Some policies provide automatic coverage for garages and sheds, but you should check if this is a concern.

Contents Coverage: Check to see if appliances are considered contents or part of the building coverage (this varies by company). If you have other contents on the premises, be sure to add this coverage. Pay special attention to lawn tractors and maintenance equipment, particularly if you move them between locations.

Rental Income Protection: If you just carry a fire policy, it probably doesn’t provide any protection for loss of income. Most landlord’s policies do provide this important coverage, either for a specific dollar amount or a specific time period (typically 12 months). This coverage protects you if you have a fire or other covered loss and are unable to rent the property.

Liability Protection: Protects you against lawsuits brought by anyone injured on the premises. It usually includes medical payments coverage as well.

Related links:

• Do you need an umbrella?
• Who pays for an apartment fire?
• Should you take a higher deductible to save money?

For more information, drop by our website at www.albionagencies.com, or get in touch with me.

The information in this post is general in nature, and geared toward insurance conditions in Western New York.  As always, you should speak with an insurance adviser to determine your specific insurance needs.

Should you take a higher deductible to save money?

Yes. Yes. Yes. (well almost always) Some people think that higher deductibles are just another way for insurance companies to avoid paying claims. But because of the way rates are calculated, the customer really benefits more in the long run.

Insurance companies set their rates so that they should make a small profit regardless of which option you choose.  So if a $250 deductible policy costs $100 more than a $1,000 deductible policy, you can be sure that the insurance company expects to pay out only $60 or $70 more on average in claims (the balance going to company expenses, agent commissions, and profit).

Another reason to take a higher deductible is to resist the temptation to turn in little nuisance claims.  All insurance companies take the number of claims into account when reviewing your policies, either directly in determining the premium, or indirectly when deciding whether to renew coverage.  Most insurance companies consider an account with several small claims to be less desirable than an account with a single more substantial claim.

Who wouldn’t want to take a higher deductible? If you would have trouble sleeping at night or just couldn’t afford $1,000 if you had a claim, then pay the extra premium for peace of mind.

(Note: in Western New York, “high” means taking a $1,000 deductible instead of the standard $250; in some parts of the country, deductibles of $2,500 or $5,000 may be practical)

For more information, drop by our website at www.albionagencies.com, or get in touch with me.

The information in this post is general in nature, and geared toward insurance conditions in Western New York.  As always, you should speak with an insurance adviser to determine your specific insurance needs.