If you are holding the property at the location, where underlying appreciation over time.
Renting out property is considered one of the good ways to be a secondary source of income.
In this article we are checking what your rental property insurance covers and what not to cover.
What does a rental property insurance cover?
Property coverage
Fire and allied perils
Protects again damage caused by fire lighting explosion rights and strikes.
Theft
Insurance cover provides financial compensation if your property or its content are stolen by a tenant or third party.
Natural disasters
Rental property insurance covers losses due to earthquake flood storm and other natural calamities as specified in the policy.
Vandalism
Compensation for repair necessary by vandal is a malicious damage to the property.
Liability coverage
Legal expenses
It covers legal cost incurred if you are sued in connection with the property subject to policy limits.
Tenant liability
Protect you from losing your file by tenants or guests. If they are injured or your property to your neck legends like faulty wiring licking roof, etc.
Option for loss of rent coverage
Rental property insurance options cover lost rental income if the property becomes inhabitable due to covered perils like fire damage.
Important to consider
Sum insured
Ensure the sum insured is adequate to cover the cost of rebuilding or repairing the property in case of a major disaster.
Policy exclusions
You must carefully review the policy document to understand what’s not covered.
What does a rental property insurance not cover?
Business Activity
In rental property insurance not cover, a tenant conducting business on the property without your knowledge or consent, any resulting damage might not cover.
Vacancy
Some policy load theft or damage if the property remains unoccupied for an extended period of approximately 30 to 45 days.
Valuable items
There might be limitation on coverage for high value items like jewelry or artwork.
You may need to schedule this item separately for full protection.
Intentional damage by landlord
If the landlord deliberately damages the property the insurance plan will be reject.
Pest Infestation
Unless the pest infestation is a direct result of a cover perils means flood attracting termites, the insurance would compensated for extermination or repair.
Lack of maintenance
If damage occurs due to the landlord’s neglect to maintain the property, insurance would not cover repairs.
Wear and tear
Gradual deterioration of the property due to everyday use is not cover. Landlord responsible for keeping the property in good condition.
War, riots and nuclear risks
These are typical exclude events, through some policies may offer them as add-on covers.
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