Owning rental properties can be a very expensive endeavor. Not only do you have to pay for the upkeep and maintenance of the home, but you also need to have insurance on rental properties. Our Hollywood property damage lawyers have seen way too many clients spend thousands of dollars to repair their homes after a bad storm or Act of God.
Here, we’ll discuss the wisdom of carrying landlord insurance on your Florida rental properties.
Many States Require Property Owners to Carry Insurance on Rental Homes
The law in many states requires landlords to carry insurance on rental properties. There are several reasons for this. First, it’s important that your tenants be protected should something happen to the house in a storm or other natural disaster.
Another reason why so many states require property owners to carry landlord insurance is that they don’t want damaged or destroyed properties sitting idle.
It’s bad enough that so many rental properties sit vacant for months at a time. The last thing the local government wants is to have abandoned, damaged properties left to suffer even more disrepair.
Your Hollywood Property Damage Lawyer Knows Florida Law Is Different
In Florida, the law doesn’t require that you have insurance on rental properties. Some of our Hollywood property damage attorneys don’t know if this is such a good thing.
True, it means you’re off the hook as far as paying for landlord insurance is concerned. At the same time, it almost seems like an excuse for property owners to avoid purchasing landlord insurance.
Landlords in Hollywood, Florida Aren’t Required to Maintain Insurance on Rental Properties
Legally, landlords in Hollywood, Florida are not required to carry landlord insurance or other coverage on their rental properties.
Unless your landlord-tenant contract promises to provide this sort of protection, there’s nobody forcing you to buy this type of insurance.
Unfortunately, what amounts to about $200 a month in insurance premiums can cost you hundreds of thousands of dollars if your property is destroyed.
This Doesn’t Mean You Shouldn’t Insure All Real Property
If you talk to any of our Hollywood property damage lawyers, they’ll tell you to buy landlord insurance on rental properties. Knowing how vulnerable an uninsured property can be, it just makes sense.
One of the things our clients tell our Hollywood property damage attorneys is that they shouldn’t have to pay extra to insure their tenant’s property. The truth is that landlord insurance on rental properties doesn’t cover your tenant’s personal property. It is meant to protect your home and your investment.
Of course, your tenants enjoy the natural byproduct of your buying insurance on rental properties. However, the protection you enjoy is worth all of the $200 it would cost you per month to insure your rental property.
Your Hollywood Property Damage Attorneys Knows the 3 Types of Landlord Insurance
When you purchase landlord insurance on rental properties, you do have options. Some policies are a lot cheaper than others. Not surprisingly, some policies offer a lot more coverage than others.
While you may think that the more expensive policies automatically offer more coverage, it’s not always the case. There are several factors that can influence the price of your insurance on rental properties:
- Size of your property
- Location
- Condition
- Your credit rating
- Previous claims filed
- Whether the home is vacant or occupied
When you meet with your insurance agent, they can explain the three main types of coverage available.
DP1 Insurance Covers Specific Perils
This is the basic policy. It is also the cheapest. Here, you can pay for specific perils. For example, you may want to purchase fire and wind damage because of where your house is located.
For example, if you own a wooden house along the beach, it makes sense to purchase wind and fire coverage.
DP2 Covers the Replacement Costs Rather Than the Actual Purchase Price
One of the best things about DP2 landlord coverage is that it offers you the replacement cost rather than the actual cost. When it comes time for your Hollywood property damage lawyer to submit your list of losses, this is key.
Imagine that you furnished the rental home before you rented it out. There was a wet bar in the basement of the property. You and your friend installed it yourselves. Had you paid a contractor to do this, it would’ve cost you about $10,000.
When it comes time to replace or repair the wet bar, you’ll receive a check for whatever it will cost to replace it, not the money you spent to install it.
Another reason this is so important is that “actual cost” policies don’t account for things like inflation. Obviously, something that only cost $5,000 in 1990 will cost closer to $15,000 or $20,000 today.
DP3 Open Perils Policies Cover Specific Perils Listed in the Policy
The third type of landlord insurance on rental properties you can buy is DP3. With this type of policy, you specify which perils you want to be covered. Anything that isn’t listed on the policy will not be covered.
When it comes to a rental property, there may be certain things you need higher coverage for. An example of this would be your personal injury or liability coverage.
You don’t want to be sued by a friend or relative of your tenants. You’re better off spending more to cover a peril such as this.
Contact a Hollywood Property Damage Lawyer Right Away!
If you own various rental properties, you have a duty to protect them. This duty is to both you and your tenants. Our Hollywood property damage attorneys have handled many cases where our clients had no insurance on rental properties.
If something happens, either to your tenants or because of your tenants, you need protection. Just because you don’t live in the house, that doesn’t mean it isn’t vulnerable to damage or even destruction.
If you find yourself in this position, you should call one of our Hollywood property damage lawyers. They’ll look at your various insurance policies to see if you’re covered. If so, they can help you file a claim with your insurance carrier.
