When the subject of landlord insurance for rental property comes up, property owners may wonder what a landlord policy covers and if having insurance for a rental property is really necessary. After all, do you need a landlord insurance policy when you have a homeowners insurance policy?
Some first-time real-estate investors are surprised to learn that homeowner’s coverage is only available for owner-occupied properties. A claim could be denied if the dwelling is used as a rental. Where do you turn if you have rented out your house, do not live there, and are faced with damages? Your landlord insurance coverage, of course!
This article takes a deeper look into this coverage to ensure you understand what it means, why it is essential, what it covers and how much it might cost you.
Landlord insurance coverage is designed for individuals with rental properties. Even if it is your residential property you moved from and rented out, you will need this coverage. That’s because renting out property exposes it to more risks and leaves you vulnerable to potential liabilities. Landowner insurance is the most suitable coverage if you do not live on the property and have tenants.
Landlord insurance policies come with varying coverages. However, a comprehensive policy generally covers 3 main categories of risks:
Property coverage protects you against damages to the property's primary structure, detached structures, and in some cases, personal property such as household furnishings and kitchen appliances if you are renting out a furnished home. In addition, the coverage generally protects against damages caused by some natural disasters, fire, burglary, vandalism, and negligent tenants.
There are several coverage packages available - DP1, DP2, and DP3. As a rule of thumb, it’s a good idea to get a landlord insurance policy with replacement cost value (RCV) coverage rather than actual cash value (ACV).
This is because ACV factors depreciation into the amount of claim paid out, while RCV makes a payout based on the actual cost to repair or replace a covered item based on current prices. In other words, having an insurance policy based on actual cash value could leave you with a higher cash bill to foot, especially if you have an older property.
Did you know tenants can sue a landlord for injuries incurred while on the property? The same applies to any guest of a tenant or service person injured while on the property. That's where liability coverage comes in.
Liability coverage in a landlord insurance policy can cover legal fees, medical bills , lost earnings, and other applicable compensations if a tenant or a third party gets injured on your property.
What would happen if your property became uninhabitable? It could be from an electrical fire, a burst pipe, or natural disaster. If you had tenants, they would have to move out while doing the repairs or maintenance.
Apart from the cost of repairs and maintenance, a top concern would be the loss of income. As long as the property is unoccupied, you cannot collect rent. This can prove financially disastrous. But with loss of income coverage, the insurer offers reprieve with rental income reimbursement.
As stated earlier, there are different coverages for landlord insurance policies. For example, insurers will sell these policies under varying packages, DP1, DP2, and DP3. While all of these packages are for landlords, they are meant for different types of landlords and situations.
DP1, for instance, is the most basic and affordable package. It offers limited coverage, only covering nine perils, and doesn't include liability and loss of use coverage. It is ideal for any landlord with vacant rental property. DP3, on the other hand, is the most comprehensive package. It covers damages to the property and other additional structures, personal property, loss of income, and liability. Additionally, it is best for landlords with tenants and not vacant properties.
In addition to the items already mentioned, most insurers allow you to add additional coverage to your policy. These are referred to as riders or endorsements. They might not be as crucial as those discussed above but could come in handy in some circumstances:
Protecting one's investment against possible risks is an essential business practice. That's why landlord insurance coverage is a must-have for property investors.
As a landlord, your property faces numerous potential risks, including liability claims from a tenant or guest or destruction by forces of nature. Damages caused by either of these could set you back thousands of dollars in repairs, liability costs, and loss of income.
A comprehensive landlord insurance policy reduces the risk of having to spend a significant amount of cash out of pocket. Instead, your insurer compensates you or the third party from covered property damages or liability claims.
Landlord insurance is costlier than homeowner's insurance coverage, varying between 20% to 25%, due to the potential risks that come with renting out a property. Companies like Obie, which specializes in landlord insurance, are a good option for learning how much landlord insurance costs for your particular property.
You can enter your property address directly on the Obie website, get an instant landlord insurance quote, and compare policies from multiple insurers online. The process is simple and transparent, with no paper applications or lengthy waits.
When shopping for landlord insurance, the cost of a policy will be affected by several factors, including:
Riders or endorsements: if you add coverage to your policy you’re getting more coverage than the standard policy includes, driving up your overall insurance cost.
Regardless of your policy's coverage, having the right insurer is critical. When faced with property damage that leaves you with no rental income, the last thing you need is to deal with an insurance company that doesn't honor your claim. So, how do you get the best landlord insurance?
Working with an online insurance broker like Obie can help save you time and money. Obie can help ensure you get a policy that meets your specific needs at an affordable price (on average, Obie customers save 25%).
When you have your rental properties held in an LLC (Limited Liability Company), the insurance process can be a little more complicated and involve a lot more paperwork.
This blog post will cover everything real estate investors need to know about insuring LLC rental property so that you can make the best decision for your business.
As a landlord, you're responsible for making sure your rental property is insured, but what kind of insurance do you need for an LLC-owned rental property?
There are three main types of landlord insurance coverage: property damage, liability, and loss of income:
LLCs can complicate the process of getting insurance for your rental property. Many insurers will only work with LLCs if they are insured using a commercial policy, or each separately named as insureds on the policy. This means that if you have multiple LLCs, you may need to purchase multiple policies.
Fortunately, there are a number of ways to get around these obstacles and find the right insurance for your LLC-owned rental property. By following the steps outlined below, you can be sure to find the coverage you need at a price you can afford.
1. LLC-owned rental properties can be added to a personal lines policy as an additional insured in most cases.
For example, if your rental property is already insured and you transfer it into an LLC, your carrier may be able to add the LLC as an additional insured. To do this, you'll need to provide your insurance company with the LLC's articles of organization and a list of all the LLC's members. In some cases, the insurance company may require additional information, such as a property management agreement.
2. LLC-owned rental properties can also be insured with a commercial policy.
This type of policy is typically more expensive than a personal lines policy, but it can offer more comprehensive coverage. To get a commercial policy for your LLC-owned rental property, you'll need to provide your insurance company with the LLC's articles of organization and a list of all the LLC's members, as well as information about the property, such as its square footage and number of units.
3. In most cases, you'll need to purchase a separate policy for each LLC-owned rental property.
However, some insurance companies offer broader master policies that can cover multiple LLC-owned rental properties. These broader master policies typically have higher limits than individual policies, so they can provide more protection if there's a major loss.
4. When shopping for property insurance, be sure to compare quotes from multiple insurers to get the best rate.
Many investors find using an online insurance broker like Obie is a good way to get simple, affordable, and transparent insurance quotes quickly. Also, make sure to read the policy carefully so you understand what's covered and what's not.
You can add LLC-owned rental property to a personal lines policy in most cases, or you may need to purchase a commercial policy. In either case, be sure to compare quotes from multiple insurers and read the policy carefully to understand what's covered.
LLC rental property insurance is important even though LLCs provide some liability protection for landlords. LLCs help to protect landlords from being held personally liable for debts or lawsuits against the LLC. However, LLCs do not provide protection from all risks.
For example, LLCs would not protect a landlord from a fire that damages the rental property or from a tenant who is injured on the property. In these cases, the landlord would be liable for the damages unless they had rental property insurance.
Rental property insurance can help to protect landlords from these and other risks, making it an essential part of owning real estate. One of the purposes of having landlord insurance is to help provide protection from unforeseen events. Here are some of the potential risks of not having LLC rental property insurance:
These are just some of the potential risks that landlords face when they don't have LLC rental property insurance. While LLCs do provide some protection, they don't protect landlords from all risks. It's important to have the right insurance in place to help protect yourself, your investment, and your tenants.
Insurance is a must for any LLC that owns rental property. However, it can be tricky to find the right policy at the right price. Here are a few tips to help you get the best deal on LLC rental property insurance:
1. One way to keep the cost of rental property insurance low is to maintain your property well. This means regularly inspecting the property and making any necessary repairs in a timely manner. By keeping your property in good condition, you can avoid costly claims that would increase your insurance rates.
2. You can also get a discount on your rental property insurance if you install certain safety features, such as smoke detectors and deadbolt locks. These safety features can help to lower the risk of damage to your property and injuries to your tenants, which can save you money on your insurance premiums.
3. When it comes time to renew your insurance policy, be sure to shop around and compare rates from different insurers. You may be able to get a better deal by switching insurers or negotiating for a lower rate with your current insurer.
4. Finally, you can use an online insurance broker like Obie to get the right coverage for rental property held in an LLC. Obie offers landlords a free quote tool that makes it easy to compare rates from different insurers. In many cases, Obie can help you find a cheaper policy than what you would get by working with a captive insurance agent. On average, landlords save 25% with Obie.
So if you're looking for the best deal on LLC rental property insurance, be sure to get a quote from Obie today.
The Inc 5000 list is well known for featuring up and coming private companies across the country. With strict standards to earn a spot on the list, it’s an incredible honor and achievement for any company that finds they’ve made the list.
Obie, an industry-pioneer in the insurance and proptech space, earned a spot on the 2022 Inc 5000 list at number 685.
Obie is an insurtech company focused on bringing speed and transparency to real estate investors during the process of obtaining insurance. Obie has identified several strategic ways to do this which has helped the company catapult itself to being a leader in insurance.
"Our team has worked tirelessly and collaboratively to grow the business these last few years," said Obie co-founder and CEO, Ryan Letzeiser. "This is a team win and it’s a testament to the job we have done so far. It’s an honor to be part of such an amazing cohort of other companies on the Inc 5000”.
The proptech and fintech industries have exploded in recent years. As part of the growth for many successful startups, this includes integrating technology with other industry leaders. Companies such as Roofstock, Stessa, Fund that Flip, Bungalow, Flock Homes, and Doorvest, have selected Obie as their premier insurance partner.
By enabling partners to feature an embedded insurance experience, their customers can get a quote and instantly bind on properties that are one to four units in size. This dramatically reduces the time spent waiting on insurance quotes, creates better communication between the platform and its customers, and removes unnecessary friction for the end user.
Ultimately, embedded insurance for proptech and fintech companies has never been easier with Obie. If your company is considering adding an insurance option, reach out to our partnerships team today to see how we can add more value to your platform.
On the cusp of launching to agents nationwide, Obie is beta-testing with select agent partners. With limited technification of the greater insurance industry over past years, many insurance brokers have been trapped in antiquated processes with limited ability to provide quotes to clients quickly.
Independent brokers will soon benefit from the proprietary technology Obie uses on its website, and with proptech and fintech partners. This is a unique advantage that represents a significant opportunity for brokers to add additional business volume to their book of business with both existing and new clients.
For independent brokers or brokerages looking to leverage the Obie technology, complete this form to learn more.
The Obie team has been working diligently to connect with, learn from, and directly serve real estate investors in all 50 states, including Washington DC over the last few years. This is clearly demonstrated by the growth of the number of employees in 2022 alone. Obie has grown from 14 employees to 68 employees within the last two years. The growth hasn’t stopped though and Obie is currently hiring for a range of positions. Check out the Obie careers page for more info on available opportunities.
Of course, it’s impossible to talk about Obie’s growth without mentioning customers. Obie maintains a 4.7 star rating on Google—an industry high rating. Reviews from Obie customers include statements such as, “Unbeatable price and user experience!” and “The overall service was great and I went ahead and signed up another policy with them due to the experience. Definitely recommend Obie for all your insurance needs.”
Obie has raised $13.7M in venture capital from firms such as Battery Capital, Thomvest Ventures, MetaProp, and Second Century Ventures and is a Y-Combinator alum.
It’s a significant honor to make Inc. Magazine’s list of 5,000 Fastest Growing Companies in America. As individual real estate investors continue to take market share as owners in the one to four unit category, paired with a true omni-channel distribution strategy, and industry leading tech, Obie is poised for continued growth and success. It’s an exciting time for the company, our partners, and our customers.
Obie is partnering with Green Doors Property Management to provide simple and transparent insurance quotes for investors. Green Doors users can get instant insurance quotes without leaving the Green Doors platform.
Green Doors is an award-winning, all-in-one property management platform. The Green Doors platform is built for property managers, landlords, and student-housing management services with features that include: real-time analytics, rent collection, document storage, and maintenance tracking. These features landed Green Doors as PropTech Outlook Magazine’s Top Management Solution of 2021.
Green Doors' mission is to help people build their long-term wealth through real estate. Today, a major barrier to investing in the market is understanding how to manage the properties effectively. The Green Doors Team believes that modern technology can streamline management operations, thereby boosting tenant satisfaction and investor returns.
“Landlord insurance is an important, yet overlooked aspect of real estate investing. It offers owners a layer of protection and peace of mind that cannot be overstated. We’re thrilled to have partnered with Obie, the leader in landlord insurance, and to offer this coverage to our owners as we continue our work in making it easier to build and maintain wealth through real estate.” —Rishabh Rastogi Green Doors, Founder
While insurance is only one aspect of asset management, it can be the source of many investor headaches. Obie has partnered with Green Doors to make the insurance process easier and more transparent. With Obie, Green Doors’ users are now able to get insurance quotes for their rental properties and bind policies—reducing unnecessary friction involved in obtaining landlord insurance.
Both Obie and Green Doors have a shared mission of creating a better overall experience for the independent landlord by providing hyper-focused and transparent tools for investors to accomplish everything on their to-do list. By allowing investors using Green Doors the option to efficiently obtain affordable insurance, this partnership allows owners to prioritize other tasks associated with their rental properties.
“Property management can easily take up large amounts of time and energy for real estate investors. Platforms like Green Doors help the individual investor regain that valuable time, allowing them to focus on their larger investment strategy. We’re excited about this partnership because it will allow us to further our mission of simplifying processes for real estate investors and make many investors’ lives much easier.” —Ryan Letzeiser Obie, Co-Founder
Obie is reinventing the insurance process for landlords and rental property investors. Whether you’re a seasoned investor or just starting out, Obie makes requesting a quote and getting coverage simple, affordable, and transparent. Obie simplifies the insurance experience by providing instant quotes. No unnecessarily tedious processes or surprise costs at signing—the way insurance buying should be.
Obie is actively partnering with technology leaders across the proptech and fintech landscape to help independent investors close more deals and see greater returns. Contact our Partnerships Team by clicking here and learn more about how partnering with Obie can add value to your platform.
Obie is partnering with LoanBase to streamline insurance for lenders, borrowers and brokers.
Cumbersome processes have long plagued real estate investors. From securing funding for new properties to providing the right insurance to close new deals. This is why Obie and LoanBase are working together to reduce friction for real estate investors.
Obie is to modernize the antiquated process of insuring rental properties for real estate investors, with a strong emphasis on increasing transparency. By working with LoanBase, real estate investors can now more seamlessly secure financing and insurance.
Obie’s innovative technology enables borrowers and lenders the ability to secure insurance without leaving the LoanBase environment, meaning investors will have proof of insurance faster to secure capital. This increase in transparency, ease, and speed help both Obie and LoanBase to reduce unnecessary back and forths and deliver a far superior customer experience to investors.
“At the core of what we want to do is provide real estate investors the comfort of knowing their investment is protected. Partnering with LoanBase, who shares similar values, investors will face less friction and hassle in securing both financing and insurance.” —Ryan Letzseiser, Obie CEO
LoanBase is a digital lending marketplace that provides real estate investors with the financing they need to grow their portfolios.
Borrowers get instant access to thousands of vetted lenders and multiple real-time quotes. LoanBase’s technology cuts the average 3-month closing time in half by eliminating manual data preparation and automating loan applications. LoanBase brings simplicity and transparency to commercial lending.
“LoanBase and Obie, together, empower real estate investors to find the right financing and insurance for their needs, while providing them with a seamless experience throughout the borrower journey.” Ari Shpanya, CEO and Co-founder of LoanBase.
Obie is reinventing the insurance process for landlords and rental property investors. Whether you’re a seasoned investor or just starting out, Obie makes requesting a quote and getting coverage simple, affordable, and transparent. Obie simplifies the insurance experience by providing instant quotes. No tedious processes or surprise costs at signing — the way insurance buying should be.
With all the momentum and energy lifting the rental property industry, in particular single family rentals, proptech companies have emerged and partnered together to create an ecosystem that allows the individual investor to have a seamless end-to-end investment experience.
As a rental property owner in California, it's important to have landlord insurance to protect your investment. Rental property insurance can help cover the cost of repairs if your property is damaged, and it can also help you recoup lost rent if your tenants have to move out due to an unforeseen event.
While you may be required to carry certain types of insurance by your lender, there are other coverage options that you may want to consider as well. If you currently own rental property or are considering purchasing an investment property in California, keep reading to learn more.
As a landlord in California, you probably know that there are plenty of natural hazards to be aware of. From earthquakes and wildfires to mudslides and flooding, the Golden State is no stranger to disasters. And while you can't control when or where a natural hazard will strike, you can take steps to protect your rental property from damage.
One of the best ways to do this is by carrying landlord insurance. A landlord insurance policy can help cover the cost of repairs if a covered hazard damages your rental property. It can also help replace lost rent if your tenants have to move out while repairs are being made to the dwelling if loss of rent is covered by your policy . Plus, if you face a lawsuit by a tenant for damages caused by a covered hazard, your landlord insurance policy can help pay for your legal defense costs and damages you may be found liable for.
There are two main types of landlord insurance policies: named perils and all-risk. Named perils policies cover only the risks specifically named in the policy, while all-risk policies provide coverage for any risk that's not explicitly excluded. Named perils policies are generally less expensive than all-risk policies but provide less protection. All-risk policies are more expensive, but they offer more comprehensive protection.
Some of the common perils landlord insurance covers may include:
Depending on where your rental property in California is located, wildfire, earthquakes, and floods may be a possibility. That's why it's important to consider wildfire, earthquake, and flood coverage in your landlord insurance policy. This type of coverage will protect your property in the event of an wildfire, earthquake, or flood and help you avoid some of the financial burdens that come with repairs. However, remember that earthquake and flood coverage are typically optional in landlord insurance policies, so be sure to ask about them when shopping for general coverage. Each of the above forms of coverage is important to consider as each needs to be purchased separately.
There are also a number of things a landlord in California can do to help reduce the risk of having to make an insurance claim for a rental property. Perhaps the most important is to keep up with necessary maintenance and repairs. By keeping the property in good condition, you can help to avoid many common causes of damage, such as water leaks or fire.
Fewer insurance claims mean lower premiums for landlord policies in California. Some landlord insurance companies offer a discount for policyholders who have no claims within a certain period of time, typically three to five years. Other insurers give their best rates to landlords with claim-free histories stretching back even further.
Before you purchase a landlord insurance policy, be sure to check with your mortgage lender to see if they have any requirements for the type of coverage you need. You should also shop around and compare rates from different insurers to find the best deal.
There are a few key things to remember when searching for California landlord insurance.
1. It's important to know what type of coverage you need. There are policies that cover property damage, liability, and loss of rental income. You'll want to ensure you have the right coverage for your particular situation.
2. It's helpful to get quotes from multiple insurers. This will give you a good idea of the range of prices for landlord insurance in California. It's also a good opportunity to compare coverages and find the policy that best meets your needs.
In fact, one of the many benefits of working with an online insurance broker like Obie is the wide range of choices and the simple, affordable, and transparent process:
3. Finally, be sure to read the fine print on any policy you're considering. Landlord insurance policies can vary widely in terms of what they cover and how much they cost. By taking the time to read through the policy, you'll be sure you're getting the coverage you need at a price you're comfortable with.
With these tips in mind, you'll be well on your way to finding the best landlord insurance policy for your needs in California.
With Obie, you can get an instant quote in all 50 states and purchase the policy online. It's faster than ever before to protect your investment with Obie’s easy process! Plus, people save 25% on average when buying their property insurance through Obie.
Here's what Obie customers are saying about their experience with the company:
"What a fantastic experience! A REAL person answered the phone. I called back with questions 4 times and all 4 times Alexander Park answered the phone and answered my questions thoroughly. Alexander Park was outstanding to deal with! Thank you Obie Insurance!" - F. Cerbone.
"Love Obie! Was able to get a speedy insurance policy that was priced better than quotes from other companies. Would recommend." - T. Baker
"Super efficient and friendly service. Not to mention excellent rates." - Rhett E.
Landlords and real estate investors know how important it is to have the right insurance. But with so many options available, finding a policy that fits your needs can be tough - especially if you don't want any of those pesky paper applications or weeks-long wait times for quotes!
That’s where Obie comes in. Obie offers insurance specifically built for landlords and real estate investors. No paper applications, weeks-long waits for quotes, or back and forths with brokers. On average, people save 25% on their rental property insurance with Obie.
So what are you waiting for? Get an instant quote for landlord insurance from Obie today.
Obie is partnering with Backflip to create a seamless experience for real estate investors. Backflip is a real estate and fintech startup improving how entrepreneurs invest in residential properties.
Backflip is a real estate financial technology company that supports individual entrepreneurs reinvigorating the housing supply by acquiring and renovating single family homes. The company offers purpose-built technology and capital products that members can use to source, analyze, and finance residential real estate investments. Backflip’s platform democratizes technology, data, and financing strategies previously only available to institutional investors and large corporations. Backlip’s innovative capital solutions allow for greater speed, flexibility and terms than traditional lenders, making them more desirable than private capital or hard money.
“Backflip's partnership with Obie is aligned with our mission to support local real estate investors executing value-add strategies. With Obie taking the insurance headache out of the equation, our entrepreneurial customers are better positioned to maximize their creative potential and deliver authentic and compelling housing products to the market.— Joshua Ernst, Backflip, CEO & Co-Founder”
Backflip’s end-to-end real estate investment platform reimagines how technology shapes the home-buying process, so it was a natural fit to partner with Obie’s tech-enabled insurance offering. Obie enhances Backflip’s platform by providing a seamless and transparent insurance option for their borrowers at affordable rates. Obie and Backflip are unified in their mission of increasing transparency for investors entering a complex real estate landscape.
“Financing options tailored to the nuances of different investment strategies are critical as an investor pivots and matures in their life cycle of owning real estate. Tech solutions like Backflip will help speed up some of the confusing and challenging processes that real estate investors face today. Together, Obie and Backflip will speed up the timeline it takes to get a deal funded. —Ryan Letzeiser Obie, Co-Founder
Obie is reinventing the insurance process for landlords and rental property investors. Whether you’re a seasoned investor or just starting out, Obie makes requesting a quote and getting coverage simple, affordable, and transparent. Obie simplifies the insurance experience by providing instant quotes. No unnecessarily tedious processes or surprise costs at signing—the way insurance buying should be.
With all the momentum and energy lifting the rental property industry, in particular single-family rentals, proptech companies have emerged and partnered together to create an ecosystem that allows the individual investor to have a seamless end-to-end investment experience. To learn more about adding seamless and instant insurance for real estate investors to your product, reach out to us here.
As a landlord in Colorado, you're likely aware of the importance of insurance. Your livelihood depends on your property generating rent, so it's crucial to have the right coverage in case something happens. But what kind of insurance should you get?
This blog post will help explain landlord insurance in Colorado and provide tips on finding the right policy for your needs.
Did you know that Colorado is one of the top states for wildfires and hail storms? In fact, 20 of the largest 20 wildfires in the state's history have occurred in the last 20 years, according to Colorado.gov and Colorado consistently has more hail storms annually than 70% of states. In addition to the threat of wildfires, Colorado ranked number 10 for the most property damage claims caused by hail in 2021.
If you're a landlord in Colorado, it's essential to make sure your rental property is adequately insured. A landlord insurance policy can help protect your property from weather-related damage and other types of damage resulting from fire, theft, and vandalism.
There are several factors to consider when choosing the best policy for your needs, including the type of rental property you own, the location of your property, and the amount of coverage you need.
The most important thing to remember is that landlord insurance is not the same as homeowners insurance. Homeowners insurance typically covers properties that are owner occupied and not held as a rental. The coverages can be similar but a Homeowners policy might not pay damages to your home if it’s found to be tenant-occupied. When shopping around for landlord insurance in Colorado, there are three main types of policies to be aware of:
This type of policy covers the physical structure of your rental property. Dwelling coverage can protect against damage from fires, storms, and other natural disasters, such as hail and wildfire. It can also cover damage caused by tenants, such as accidental fires or water damage from burst pipes.
This type of coverage protects the personal belongings that you keep on the premises, such as furniture and appliances, you furnish for use by your tenants. If these items are damaged or stolen, your landlord insurance policy can reimburse you for their value.
This type of coverage can protect you from being held responsible for injuries that occur on your property. For example, if a tenant is injured while staying in your rental unit, liability insurance can help pay for their medical expenses. Liability coverage can also help if a tenant sues you for wrongful eviction or discrimination.
When it comes to the cost of landlord insurance, there are several proactive steps you can take to help reduce having to make a claim and keep your premiums low. Here are some tips to help you keep your property safe and your insurance costs affordable:
Following these tips can help you avoid making a landlord insurance claim and keep your property safe and secure. If you need to file a claim, document everything thoroughly and work with your insurer to get the best possible outcome.
Last but certainly not least, make sure you’re getting the right coverage before investing in a landlord insurance policy. Check with your mortgage lender about any requirements for types of coverage, and then shop around to find the best coverage options for your rental property.
There are a few things to keep in mind when looking for landlord insurance in Colorado:
1. Make sure you understand the coverage you're getting. Don't be afraid to ask questions to ensure you're getting the right policy for your needs.
2. Be aware of the unique risks of being a landlord in Colorado. For example, because of the state's topography and weather patterns, your rental homes are at an increased risk for weather-related damage, such as wildfires and hail storms, and may require extra coverage.
3. Shop around for the best rates. Get quotes from multiple insurance companies so you can compare and find an affordable policy that gives you adequate coverage for your rental property.
4. Work with an experienced online insurance broker. A broker can help you navigate the process of finding and choosing a landlord insurance policy in Colorado.
One of the most significant benefits of purchasing landlord insurance through Obie rather than a representative from a single carrier is that you have access to a wider variety of options for excellent coverage.
Obie streamlines the insurance process by providing instant quotes in all 50 states with an easy-to-use online platform. As a result, landlords save 25% on average when getting their property coverage through the company, which is why more people are choosing Obie to get landlord insurance in Colorado and protect their investment.
Insurance brokers like Obie are the key to finding a great policy, and they can get you multiple quotes from various companies. This gives more options for what type of coverage might work best for your needs. In addition, online brokers often provide valuable insights into policies that captive on-site agents may not know so well or want to help their clients discover.
Ultimately, the choice of which type of agent to work with comes down to personal preference. Some landlords prefer working through an insurance broker because they offer flexibility and convenience, while others choose to work directly with a captive agent offering insurance from a single carrier.
If you're a landlord in Colorado, getting adequate landlord insurance coverage is important. The best way to do this is to compare quotes from multiple carriers and read customer testimonials before making a final decision. Doing so helps ensure you're getting the best possible coverage at the most affordable price.
When looking for the best landlord insurance in Colorado, reading what other customers have to say about their experiences can be invaluable. For example, here's what several landlords recently said about purchasing insurance for rental property through Obie:
"What an easy and professional experience! I worked with Doug Bell. He was amazing. Great rate! Fast response!" - Esther L.
"I needed an insurance policy for my rental property. Obie Insurance was quick and prompt and gave me several quotes to review. I appreciate all the help that Doug Bell provided to me. He was excellent to work with. I'll use Obie for my insurance needs for other properties that I buy." - V. Pai
"Super efficient and friendly service. Not to mention excellent rates." - Rhett E.
If you own rental property in Colorado or are thinking about buying, you know how important it is to have landlord insurance. But with so many options available, finding the right policy at the right price can be challenging.
That’s where Obie comes in. With a few clicks of the mouse, you can get instant insurance specifically built for landlords and real estate investors who are tired of waiting on paper applications or getting lost in endless back-and-forth with agents.
So what are you waiting for? Get an instant quote for landlord insurance from Obie today.
Insurance premiums across the board are increasing at a fever pitch due to rising inflation and the increase in catastrophic weather events. While there are a few practical ways to keep your insurance costs from rising, inflation, labor trends, supply chain issues, and weather events are all out of your control and your wallet is likely to bear the burden.
In this article, we’ll focus on how inflation is directly impacting real estate investors, from an insurance perspective, as well as a few options you have to avoid unnecessary increases in premium price.
When calculating premium pricing, insurance companies like Obie look at a variety of factors to determine the policy cost. These factors include, but are not limited to:
Here is an example of how the insurance industry determines insurance premium costs:
About 70% of cost of your policy is priced on the value of your properties replacement costs known as coverage A. If materials and labor have risen an estimated 20% since last year, you can typically expect your policy to go up 14% based on your replacement cost alone.
Here’s what that math ends up looking like:
70% of Premium x 20% = 14% increase in premium costs
As an example, let’s assume you have a 3-bed, 2-bath, single-family rental located near Cleveland, OH with an annual premium of $1,500. Your premium may now be closer to $1,710/year. Here’s what that math looks like:
$1,050 (70% of Premium) x 20% = $210 increase in premium costs
Let’s dig in further to see why premiums have gone up for so many real estate investors.
Housing material and labor costs have increased. Material and labor directly affect insurance premiums due to the replacement cost. Replacement cost, based on how it is calculated, makes up a large majority of the cost of your insurance premium.
We have all seen the price of lumber rising along with other commodities that are associated with the rebuild costs of a home. Because overall buying power has been greatly reduced, the price for materials alone has gone up exponentially.
Let’s break this down further.
A popular topic in the news on a regular basis is the price of gas by the gallon. This directly affects the cost of the transportation of all goods—including building materials being imported and transported throughout the country. As gas prices continue to rise, suppliers, service providers, and retailers across the country need to adjust their prices. Ultimately, this leads to an increase for nearly all goods and services, including those required to repair and replace homes. For that reason, insurance providers also must account for the increase in prices which is reflected in insurance premiums.
Lumber futures, while down from earlier in the year, are still up tremendously from pre-pandemic levels. The dramatic increase puts strain on all industries requiring lumber, but especially with regards to replacement costs of any dwelling. Combined with the extremely high demand of new housing, this only increases the cost of replacement for existing dwellings.
The rise in inflation has increased the cost of everyday consumer goods, and in order to maintain buying power we are now seeing an increase in wages for labor.
Wage increases impact the rebuild cost of your home. Supply and demand also increased the cost of skilled labor. Supply of labor has been limited due to a national shortage of trade workers. As of April 2022, the construction industry is down by about a half a million skilled workers. When you combine those two factors the results are wage increases of more than 10% year over year which are not expected to slow down in the coming 12-18 months.
With roughly 20% of the replacement cost of your investment property being labor costs and commodity costs, the price to replace your property has now gone up significantly and it is not the fault of the insurance company. When those costs increase, the price of insurance premiums will likely increase as well, and in certain geographies upwards of 20-30% in some geographies year over year.
Catastrophic storms have increased in severity and frequency. 2020 produced more individual billion dollar storms than any year on record with 22 storms, which smashed the previous record of 16. Many have predicted that 2022 is likely to be a particularly bad year in terms of weather.
A small, but not insignificant percentage, of your policy cost pays for a displaced tenant and the lost revenue on your property (Coverage D with most carriers). As your rental income climbs, so does your premium. This is important to note as anywhere between 5-10% of premium costs land in this section. Rents in many areas have gone up as much as 20-25% in the last 18 months. With increases like this, you can expect on the low end for your policy premium to adjust in kind.
Here’s what this looks like:
20% (rent increases) x 5% (premium costs) = 1% gross premium increase
This also serves as a reminder to always be updating the income of the property and to make sure you make these policy adjustments annually.
Despite rising costs of goods and services, increased severity of catastrophic weather events, and other factors linked to the rise in insurance premiums, real estate investors are not left without options.
Here are several things you can do as an investor to avoid unnecessary increases in insurance premiums:
If you’re not an Obie customer, you can get an instant quote or ask your insurance company how they can help you avoid high-cost insurance.
Keep in mind, with Obie you can customize your coverages and manage your risk so you get the best rate.
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Sometimes, purchasing the right insurance for your property is not always as easy as we would wish it to be. In addition to choosing the best landlord policy for your rental property, you also have to differentiate what policy works best.
The most common policies you will see insurers quoting are DP1, DP2, and DP3. At first glance, these categories may seem straightforward enough, but the truth is these three types of policies and how they work can be surprisingly complicated. As a result, it is not uncommon to find property owners purchasing the wrong policy, especially when dealing with DP1.
What exactly is DP1, and why should you care? What does it cover, and when should you acquire it? What distinguishes it from other insurance plans? How do insurers determine compensation under this policy?
If you're looking for the answers to these questions, this article will help make sense of them.
A DP1 policy is a basic dwelling fire policy. It is common among property owners whose rental insurance would otherwise not cover the property in question. This will mostly touch on vacant units or standalone structures, like boat houses.
It is also referred to as a named perils policy, meaning it only protects you against damages from perils (aka risks) named in the policy. The insurance will not reimburse you if your house incurs damages from a peril not stated in the DP1 policy.
Another aspect that distinguishes the DP1 policy from the others is that it only pays the actual cash value (ACV) during a claim. That means it factors in the property's depreciation. So, your payout may be less than the property's actual replacement cost to repair or rebuild. . That’s because the older your house, the less value it has, at least according to the terms of a DP1 policy.
How does this work? Let’s say you have a rental unit needing a new roof due to a covered peril . The roof will cost you about $20,000, and the old one has been in place for 15 years. The expected lifespan of a roof with fiber cement shingles is about 25 years. You can calculate the actual cash value of your claim using the below formula:
In this example, you would receive $8,000 from your DP1 insurance policy. However, since the cost of a new roof is $20,000, you will be out of pocket for the remaining $12,000.
Nevertheless, some insurers provide replacement cost value (RCV), which does not factor in depreciation in the payout. It will, however, come at an additional cost. Since this option is not explicitly available, ensure you speak to your insurance agent to see whether it is possible to get it.
As stated, a DP1 policy is pretty basic, meaning it covers some of the most common perils, including:
In addition to these, a DP1 policy may also cover the property’s additional structures, like fences, garages, sheds, and personal property. However, some insurers do not cover additional structures, personal property, or liability. Those that do so may require an additional premium.
Although DP1 covers common perils, it doesn’t cover all of them unless otherwise stated in one’s policy, including
It is crucial for users to go through the provided policy and identify what perils are covered, which are excluded, and whether there is an allowance for additions before settling for any policy.
Considering that DP1 is a pretty basic policy with many exclusions of significant common perils, sometimes property owners question whether it is really necessary to have.
Here are a couple of situations where having a DP1 policy could be a good idea:
Perhaps you are waiting for tenants to move into your rental unit, which might take more than 60-90 days. Maybe you are left with an extra house after purchasing and moving into your new home. Or, perhaps, you inherited property and have put it on the market.
Whatever the reason, you can use a DP1 policy as long as that property sits vacant. Although the property is unoccupied so has no risk of tenant damages, it still faces risks from basic perils that DP1 covers.
This coverage ensures you are still protected against these common perils and won’t have to foot the bill for repairs.
It is always essential to have the best possible insurance coverage for your property, but landlords also have to conduct a cost-benefit analysis. A DP1 policy providing basic coverage is better than leaving a rental property uninsured.
However, if you choose this insurance option, remember it is only basic. Any damages that might arise and are excluded from your policy will be yours to bear. And that’s a financial risk that could be higher than it would have cost for a better policy.
Apart from DP1, two other policies to consider are DP2 and DP3. Like DP1, the DP2 policy is also a named peril policy. The main difference is that it offers protection against more common perils than the DP1 policy. By comparison, the DP3 policy is an open perils policy. It covers damages against all risks unless otherwise stated (or specific exclusions).
DP1 is also a more affordable option than DP2 and DP3. A DP3 is the most expensive policy. In addition, both the DP2 and DP3 provide replacement cost value (RCV) where the insurer doesn’t deduct the property’s depreciation from your claim (Note: in some DP2 and DP3 policies for certain roof ages, roofs may be covered for ACV rather than RCV while the rest of the house will be covered for RCV.).
One of the most effective ways to find the right policy is to hire a professional insurance broker who has access to industry-best rates for rental property and casualty plans, ensuring that your assets are protected. Insurance brokers also have a fiduciary duty to you, which means they are legally required to put your interests ahead of those of the insurance companies.
An alternative route is to contact other real estate investors. Hearing about others' experiences may help you determine whether the insurer pays claims on time.
Another popular method for real estate investors to locate the right insurance for their property is Obie. Obie can help you get a landlord insurance estimate and inexpensive, transparent coverage entirely online. There are no paper applications to fill out or lengthy waiting periods.
Answer a few basic questions to get the appropriate insurance and coverage for single-family rental properties, multifamily structures with two to four units, and condominiums based on your specific requirements. On average, landlords are saving 25% with Obie.
Go here to get an instant quote today.
In conclusion, the DP1 policy is your go-to coverage if you have a tight budget, have a vacant house. It is a basic policy covering a few common perils, like lightning, fire and smoke, windstorms, hailstorms, and explosions.
Due to its exclusion of some common perils, like theft, vandalism, and flooding, DP2 or DP3 policies may be better if you have the budget for additional insurance coverage.
Before settling on a specific policy, it's advisable to understand the common perils covered and those excluded. Remember that claims with a DP1 policy are paid based on the actual cash value. So, if your rental property is older, you may pay more out of pocket once depreciation is factored in.
A dwelling fire policy - or DP insurance policy - is designed for landlords with rental property that standard homeowners insurance does not cover. Despite the name, these policies cover more perils than a fire.
There are three policies under this umbrella, which can sometimes confuse beginner and experienced landlords alike. Choosing the right coverage between the three - DP1, DP2, and DP3 - requires one to pay closer attention to what each policy does and does not cover.
If you are wondering whether DP2 is the right policy for your property, this article provides all the answers. You will learn what a DP2 policy is, what it covers, what it does not cover, when you can use it, and other options to consider if it is not the best coverage for you.
A Dwelling Fire Form 2 policy is insurance coverage for rental properties, commonly known as DP2 or broad form. It is a named peril policy covering only the perils named in the policy. In short, it does not provide you protection against any risk that is not explicitly stated in the policy. There are 18 named perils in a DP2 policy, usually available from all insurers.
Second, DP2 is a replacement cost value (RCV) type of coverage. It means that you receive the amount needed to repair damages to the property during a claim. It will save you from footing part of the bill from your pocket like you would with an actual cash value (ACV) policy such as DP1.
For instance, let’s say you were to rebuild a portion of your house after damages from one of the named perils. The cost of repairs is $200,000. Under the DP2 policy, your insurer will pay for the total cost of doing these repairs at the current prices, assuming the losses are below the policy limits. On the other hand, a DP1 policy that uses actual cash value will have a lower payout since the insurance company factors in depreciation.
The DP2 policy covers any damages to the primary structure and detached ones, like garages, sheds, fences, and patios. As mentioned earlier, DP2 has a total of 18 perils:
In addition to these perils, DP2 also provides fair rental value coverage. So if your property is uninhabitable due to any of the named perils and you lose income, your insurer will reimburse you the fair value of the rent up to the limits on your policy.
Considering that you still have to pay some expenses on the property even when vacant, like the mortgage and property taxes, loss of rent coverage is a critical aspect of this policy. It allows property owners to keep earning during such incidents and meet necessary bills without digging into their personal savings.
Out of the 18 perils, you will notice that three are listed as accidental or sudden. As the definitions suggest, insurance companies only pay these claims if the damage results from an accident or a sudden unexpected event from these three perils.
Some insurance companies include personal liability and personal property on the DP2 coverage. However, you must speak with your insurance agent to determine whether this would be available as an addition. If available, keep in mind that the insurance company may treat it as additional coverage at an extra cost.
DP2 policy is like having an in-between option between DP1 and DP3.
For starters, it is more comprehensive than a DP-1 policy. As a landlord, you can get protection against more perils, including theft and malicious mischief that are not available with the DP1 option. Second, it is more affordable than a DP3 policy, allowing you to not settle for less due to budget constraints while still getting a lot of coverage at an affordable price point.
However, the DP2 policy may not be the ideal choice when you have a vacant house. Many landlords want to use DP2 while their property is on the market, either for sale or rental. Unfortunately, many insurers do not allow this.
While DP2 covers more perils than a DP1 policy, it is not the ideal coverage if you have a property that will sit vacant for more than 60 to 90 days. The exact timeframe for this restriction varies between insurance companies.
Insurers avoid covering vacant homes under DP2 because tiny issues that could culminate into more significant damages can go unnoticed. This leads to claims for higher amounts to fix such damages.
If you determine that the DP2 policy is not the right coverage, other dwelling policies to consider are DP1 and DP3.
DP1 is also a named-peril policy but with more exclusions than DP2. In fact, the DP1 policy covers only nine perils, making it a more basic policy for a specific niche of property owners.
It is only ideal when you cannot afford DP2 and DP3 or have a vacant property. In addition, the DP1 policy is an actual cash value type of policy, meaning you do not receive the total replacement cost of the repairs at the current price. The payout is usually less due to depreciation, meaning you may need to go out of pocket to pay for some of the replacement costs.
On the other hand, the DP3 policy covers all perils unless they are explicitly excluded from the policy. This makes it the most comprehensive dwelling policy of the three options and the most expensive. Like the DP2 policy, the DP3 policy also pays the replacement cost value for repairs caused by covered perils (except in some cases for roof repairs based on the age of the roof).
There are several options for finding the best DP2 policy for your rental property:
Obie is insurance built for landlords and real estate investors.
You can obtain easy, affordable, and adequate coverage entirely online through a landlord insurance quote. Furthermore, there are no paper applications to complete or lengthy waiting periods.
Obie streamlines landlord insurance, offering instant quotes in all 50 states. Getting a quote and purchasing a policy online is faster than ever before, making it easy to get covered and protect your investment.
Your existing insurance provider or broker may be a good place to start looking for landlord insurance. This may be the simplest option because you won't have to do much research or compare many quotes from several carriers yourself.
However, while this is the most obvious choice, it isn't always the best way to obtain landlord insurance. Some firms compete on price by providing limited coverage and poor customer service when a claim is submitted.
Do you know of a friend or family member who has invested in rental property? Most likely, they already have landlord insurance. They may discuss their experiences with insurers and lessons learned and recommend coverage or an agent they've used.
Finding the best landlord insurance might be as easy as connecting with other real estate professionals through social media. You can also visit property exhibitions and search for organizations willing to include you in their groups.
The DP2 policy is the best option if your budget does not allow for DP3. It’s a more comprehensive landlord insurance policy than a DP1, which is a more basic landlord insurance policy.
It provides coverage against numerous perils, more than you would get with a DP1 policy. These include fires and smoke, windstorms and hailstorms, freezing pipes, burglary, and vandalism. In addition, you get reimbursed fair rent value by your insurer if a covered peril leads to loss of rental income.
DP2 covers the property’s primary structure and other additional detached ones, like garages. As much as the DP2 policy is broader than a DP1 policy, it does not protect your personal property or cover liability. However, some insurers might be willing to add these to your policy at an extra fee.
Are you looking to rent out your primary residence or purchase another home as an investment property? Has your insurer stated your homeowners coverage will not be valid in cases like these?
Having the right insurance policy is an essential aspect of property investment. A few damages could set you back thousands of dollars or lead to financial distress. But what coverage is the best when you have a residential property in the market, and your homeowners policy can’t be used?
That's when you'll want to acquire a DP3 policy. This article will explain what the DP3 policy is and why you should get one.
A DP3 policy is one of the three policies under Dwelling Fire Insurance policies. It is an open peril policy, covering all perils unless the insurer has stated specific exclusions. For instance, if the insurance company says that they do not cover risks from political unrest, it will not compensate you for any damages from such peril.
DP3 coverage pays claims on replacement cost value (RCV) instead of actual cash value (ACV). When you make a claim for a covered peril, the insurer pays the replacement cost of the damages within your policy limits and at current prices.
On the other hand, actual cash value, commonly used with the DP1 policy, deducts the property's depreciation cost from your final payout, which may result in not having enough money to pay for a replacement at today’s prices.
To illustrate, let's say you own an extra home that's 10 years old. You need to make significant repairs after a hailstorm causes substantial damage. These repairs are estimated to cost around $25,000.
If you have the DP3 policy, your insurer will reimburse you the replacement cost for these damages at the current market prices of items. However, if you were under DP1 that uses ACV, you would receive $25,000 less the depreciated value of the items damaged. In other words, you will receive less money under an ACV policy, leaving you with part of the bill to pay for using your own cash.
Thanks to its broad coverage, the DP3 policy is one of the most popular options. As an open peril policy, it typically covers all risks property owners experience unless otherwise stated in the policy. These include:
DP3 policy provides coverage against damages on the property's primary structure and detached structures, like fences, sheds, pool houses, and garages.
However, if your policy names an exclusion, the insurer will not provide coverage for any damages by the said exclusion. These are not definite and vary between insurance companies.
They include floods, acts of terror, mold damage, intentional damage, and neglect. It also excludes ordinance or law and water backup and sump pump overflow. O&L is where you are required by law or ordinance to meet current building codes when rebuilding your property. Water back up is necessary when certain causes of water loss are excluded from the general policy (like a sump pump overflowing in the basement or water backing up from a shower drain.) Check your quote or policy to see if these coverages can be added for an additional cost.
This policy reimburses you for lost income up to your policy limit when the property is not in use. However, the cause of the loss must be from a covered peril. The damage must also make the property uninhabitable, and current tenants have to move out, or no tenant can move in until the property is completely repaired.
Assume someone is injured on your property, and you are found liable. Could you afford to cater to their medical costs and legal fees? Maybe yes. But would this take a toll on your finances? Absolutely. That's where personal liability coverage comes in—to cater to such costs if an injured party sues you and you are found liable for damages.
Most DP3 policies will cover personal property furnished for use by the tenants, such as appliances. However, if you need additional coverage for household furniture for a fully-furnished short-term or vacation rental property , you may want to speak directly with an insurance agent to confirm you have the proper coverage.
This policy is only available for residential property owners who do not reside on the property. For example, maybe you have bought a new home and intend to make it your primary residence, leaving your current place to a tenant. Or perhaps, you have purchased a single-family home or small multifamily property to use as a full-time rental.
Homeowners insurance only covers owner-occupied residential properties. It also may not provide coverage for damages made by tenants if you are renting part of your primary residence. That's where a DP3 policy might be ideal for you.
Keep in mind that the DP3 policy does not cover seasonal residences or residences that will be vacant for an extended period (like more than 60-90 days). Such properties are considered a higher risk because no one is there to keep track of any damages. A small undiscovered leak in a vacant property could lead to more damages that would have been fixed earlier if the house had been occupied.
You will need different insurance coverage if you have a vacation home or suspect your extra residential home will be vacant for a while. Insurance companies usually provide vacant property policies to cover such properties. Another option would be a DP1 policy. Neither of these cover theft and vandalism. However, some insurers may be able to add them to vacant property insurance coverage.
Dwelling Policies has three policies under its umbrella: DP1, DP2, and DP3.
First, you could opt for the DP1 policy. It is the most basic policy of the three, covering fewer perils. The DP1 policy is a named policy coverage that covers only nine perils. It also pays claims less the depreciation cost of the property, leading to a lower payout for a covered claim. Affordable as this option might be, as a rule of thumb, it is only advisable to get it if your property will be vacant for an extended period or you are on a tight budget.
A second option is a DP2 policy, touted as the middle-of-the-road policy of the three options.
It is more affordable than a DP3 policy and covers more perils than the DP1 policy. In fact, it provides coverage against 18 perils, including burglary, flooding, freezing pipes, and vandalism that are not available under the DP1 policy.
However, it may not cover personal liability or personal property. If you have personal items on the property and would like to protect yourself if someone incurs injuries on your property, the extra cost of the DP3 policy would be worth it.
Getting an insurance policy is one thing, but obtaining it from a provider that promises more than it can deliver may cause more harm than good. That's why finding a broker who can assist you in selecting the appropriate property coverage and real estate investment protection is so essential.
Here are four options for finding the best DP3 policy for your rental property:
Obie is an online insurance broker specializing in landlord insurance built for rental property owners and real estate investors.
You can obtain easy, affordable, and adequate coverage entirely online through a landlord insurance quote. Furthermore, there are no paper applications to complete or lengthy waiting periods.
Obie streamlines landlord insurance, offering instant quotes in all 50 states. Getting a quote and purchasing a policy online is faster than ever before, making it easy to get covered and protect your investment. Go here to get an instant quote today.
Your existing insurance provider or broker is another option for finding landlord insurance. This may be the path of least resistance because you won't have to do much research or compare many quotes from several carriers yourself.
However, while going to an insurance agent may be the most obvious choice, it isn't necessarily the best way to obtain landlord insurance. That’s because some insurance carriers compete by offering a low-priced policy with limited coverage and poor customer service when a claim is submitted.
Real estate investors who have already “been there, done that” are another way to find landlord insurance. People are usually more than willing to discuss their experiences with insurers and lessons learned and recommend coverage or an agent they've used.
Finding the best landlord insurance might be as easy as connecting with other real estate professionals through social media, networking events, or trade shows. Insurance companies often have booths set up at events where you can meet a representative face-to-face and learn more about the ins and outs of landlord insurance.
DP3 policy is excellent insurance coverage for landlords to consider. It is an open peril policy that pays replacement cost value during a claim. As an open peril policy, it protects you against most perils.
However, insurers can name exclusions of risks they will not cover in the policy. Therefore, if you opt for a DP3 policy, it is crucial to compare exclusions between insurers. Any named exclusion, like floods or earthquakes, means the insurer will not reimburse you if your property incurs damages due to excluded perils like these.
Are you faced with the seemingly impossible choice of choosing the best dwelling insurance policy?
You’re not alone. It’s a problem many property owners face, especially those new to property investing. Between understanding all the insurance jargon and analyzing the aspects of every policy, it is not unusual to feel like giving up during the process.
When looking for insurance for your rental property, you will likely come across three different types of policies: DP1, DP2, and DP3. While they all offer some level of protection for your property, they vary in terms of what is covered.
This blog post will break down the key differences between these three types of landlord insurance policies. So, whether you're just starting out as a landlord or are looking to switch policies, read on to learn more!
Dwelling policy insurance is an umbrella encompassing three different policies. It includes DP1, DP2, and DP3.
Dwelling policies or dwelling fire policies are insurance coverages offered instead of homeowners insurance. Although the name states fire, these policies cover more than just fire peril. They differ in covered perils and exclusions depending on the specific policy.
The main differences between the policies are what is covered and the payout methods.
DP1 and DP2 are both named peril policies, where insurers only cover risks detailed in the policies. The main difference between DP1 and DP2 is that DP2 covers more risks, eighteen in number, while DP1 covers nine. DP 1 is the most basic form of coverage of the three.
For instance, DP2 covers burglary, malicious mischief, freezing pipes, and falling objects, while DP1 does not cover these perils. However, both cover fire, lightning, smoke, riots, and damage from wind or hailstorms (see the below diagram for a comparison of both policies).
On the other hand, the DP3 policy is an open peril policy. It covers all risks except those that the insurer has explicitly excluded. This makes it a more comprehensive policy of the three, providing coverage for more perils.
The DP1 policy is quite different from its counterparts when it comes to payouts. While it uses actual cash value (ACV), DP2 and DP3 payouts are on a replacement cost value basis (RCV). Under the DP1 policy, claim payouts are based on the repair cost minus depreciation. On the other hand, replacement cost value with DP2 and DP3 insurance policies pay the replacement costs for damages using current prices but within the limits of your policy.
For example, if you need to repair damages worth $20,000 on a 10-year-old property, a DP2 or DP3 policy will pay the replacement cost value for these damages. The only cost you will pay is the agreed-upon insurance deductible. But if you had a DP1 policy, you would receive less than $20,000 due to depreciation of the property and have to pay the remaining cost with your own cash.
Another difference between these policies is the cost. DP1 is cheaper as it covers fewer perils, while DP3 is the most expensive. DP2 insurance is in the middle, a more affordable option than DP3 that covers more risks than DP1.
A DP3 policy generally covers everything a DP2 policy does, plus extra coverage. However, there are some perils that a DP3 policy typically does not cover, including:
The need for any DP policy will depend on your current situation. DP1 is an option if your budget does not allow for a DP2 or DP3 policy. It is also suitable for property owners or homeowners who:
Unfortunately, DP1 does not provide coverage against vandalism and theft. Vacant homes are more prone to these risks and sometimes squatters. Affordable as it is, it could cost you more in the future if you face any of these risks without insurance.
DP3 policy is best for homeowners renting residential properties only. However, it does not cover residential properties you leave vacant for extended periods, usually 60 to 90 days. These include vacation homes or secondary residences vacant for the better part of the year.
It is also important to keep in mind that most DP2 policies do not provide coverage for properties that remain vacant for extended periods. Why? Because insurance companies term these as higher risk than tenant-occupied residential homes. As such, items needing repair may go unnoticed for an extended time, leading to more significant damages and higher claim amounts.
In addition to covered perils, there is also the aspect of what is covered.
All three policies cover damages to the property’s primary structure and other detached or additional structures, like garages, pool houses, fences, and sheds. DP2 and DP3 will also cover loss of use. This is when you lose rental income when the property is not livable due to any of the covered perils. Finally, DP3 includes personal liability coverage, ensuring you are protected against liability suits if someone gets injured on your property and you are found liable.
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There are several alternatives for choosing the best landlord insurance package for your rental property:
Obie: If you’re looking for an easy way to protect yourself and your investment, check out Obie. No paper applications, week-long waits for quotes, or back and forths with brokers.
With Obie, you can get easy, affordable, and transparent coverage for your rental property entirely online through a landlord insurance quote. Furthermore, there are no paper applications to complete and no lengthy waiting periods. On average, landlords save 25% with Obie.
Go here to get an instant quote today.
Brick and mortar insurance agent: You can also search for landlord insurance by checking with your existing insurance provider or broker. This may be the simplest solution because you won't have to conduct much research or compare many quotations from numerous companies.
While providing a simple option, it isn't always the best method to get landlord insurance. Some businesses compete on price by providing limited coverage and terrible customer service when a claim is made.
Other real estate investors: Do you know of a friend or family member who has invested in rental property? Most likely, they already have landlord insurance. They may talk about their experiences with insurers and what they've learned and recommend coverage or a specialist they've worked with.
Networking with fellow landlords: Finding good landlord insurance may be as simple as networking with other real estate professionals on social media or local networking events. In many cases, investor groups may be more than willing to include you as a member.
Landlord insurance is a must-have for any property investor. Whether you choose a DP1 policy, DP2 or DP3 will depend on your needs. Each of the available dwelling policies will suit a specific situation.
For example, if you have a vacant property or are on a tight budget, a DP1 policy might be best. This policy is affordable, but it covers limited perils. An alternative to this is the DP2 policy, which covers more risks and is slightly less costly than DP3. Still, it doesn't cover vacant houses and has limited coverage compared to DP3.
DP3 policy is the most comprehensive and usually the most preferred by landlords, despite its higher premium. In addition to the property’s primary and additional structures, DP3 covers loss of income and personal liability.
Before settling on any dwelling policy, it's good to work with a professional insurance broker specializing in landlord insurance. In addition, an online insurance broker like Obie can help ensure you get a policy that meets your specific needs at an affordable price.
Landlord insurance is a type of insurance that provides coverage for landlords renting out their property. This type of policy can provide protection against damage to the property, liability claims from tenants, and loss of rental income.
If you're a landlord in Illinois, it's essential to know how insurance for rental property works and how to find the best coverage for your needs. This blog post will take a closer look at landlord insurance in Illinois to help you make an informed decision about which policies are best for you and your rental property.
As a landlord, it's crucial to have adequate insurance coverage for your rental property. Rental property is a significant investment, and if something were to happen to your property, you could be left with a substantial financial burden.
Landlord insurance is a type of insurance that specifically covers rental property. It can protect against various risks, including damage to the property, loss of rent, and liability. Landlords and property managers should carefully consider their needs in order to choose the right policy.
For example, some policies may only cover damage caused by fires or storms, while others may provide more comprehensive coverage. In addition, landlord insurance can also offer financial protection if a tenant causes damage to the property.
The risk of owning rental property in Illinois is further heightened by the state's weather hazards, including severe thunderstorms, tornadoes, blizzards and hail, ice storms, and flooding. Your most basis landlord insurance policies will protect against perils and other insured risks such as fire, lightning, internal and external explosions, windstorm, hail, riots, smoke, aircrafts, vehicles, and volcanic explosions.
If your property is damaged or destroyed, landlord insurance can help cover the cost of repairs or replacement. Additionally, landlord insurance can provide liability coverage if a tenant is injured on your property and you are found legally responsible.
Landlord insurance rates in Illinois can vary depending on the city in which the rental property is located. In general, landlord insurance may cost more in a large urban area like Chicago than in a smaller city or town in downstate Illinois. There are several reasons for this cost difference.
First, larger cities tend to have higher crime rates than smaller communities, which can result in increased liability risks for landlords, property managers, and insurance companies. In addition, urban areas typically have a greater density of housing units, which can lead to more wear and tear on rental properties. Lastly, big cities often have a higher cost of living overall, which can translate into higher prices for landlord insurance.
While there may be some variation in price depending on the specific location of the rental property, landlords and property managers should expect to pay more for insurance in Chicago than in other parts of Illinois.
To ensure that you're adequately protected with the right landlord insurance policy at the best price, it's important to work with a reputable insurance broker or agent who can tailor a policy to meet your specific needs.
By having adequate insurance coverage in place, you can better protect yourself from the possibility of financial ruin if something happens to your rental property.
There's no question that being a landlord comes with a lot of responsibility. You need to find reliable tenants and keep your property in good shape, but you also need to ensure that you're adequately insured in case of any accidents or damage.
With so many different landlord insurance policies on the market, it can be challenging to know where to start. The best place to begin is familiarizing yourself with the different types of coverage available.
Here are a few factors to consider when choosing a landlord insurance policy:
1. First, consider the type of property you are renting. For example, suppose you are renting a single-family home. In that case, you may need a different policy than if you are renting a multifamily building. Therefore, choose a policy that covers the type of property you are renting.
2. Next, think about the amount of coverage you need. For example, how much coverage do you need for your personal belongings? For your tenants' belongings? To make repairs and replacements? Make sure to get quotes from several different insurers so that you can compare coverage levels and prices.
3. Finally, pay attention to the details of the policy. What does the deductible look like? Are there any exclusions that could affect you in the event of a claim? Make sure you understand all the policy details before signing on the dotted line.
Once you better understand your needs, you can start shopping around for the best policy. Here are a few tips to help you find the best landlord insurance policy for your needs in Illinois.
One option is to work with a local insurance agent or broker. This can be a good choice if you have a specific insurer in mind that you would like to work with. However, not all independent agents have experience working with real estate investors and may not have access to the best prices or policies to meet your needs.
Another easy and cost-effective way to find landlord insurance in Illinois is by working with an online insurance broker like Obie. The company is a fantastic resource for obtaining a landlord insurance quote and simple, low-cost, and transparent coverage entirely online.
There are no paper applications to fill out or lengthy waiting periods. Simply respond to a few property questions to obtain the right insurance and coverage for single-family rental property, multifamily dwellings with 2-4 units, short-term rentals, and condominium units based on your specific needs.
Customer testimonials can provide valuable insights into a product or service. They can give you a sense of what other people have experienced and whether or not the product or service is right for you.
Here’s what two landlords recently said about purchasing landlord insurance through Obie:
“I needed an insurance policy for my rental property. Obie Insurance was quick and prompt and gave me several quotes to review. I appreciate all the help that Doug Bell provided to me. He was excellent to work with. I'll use Obie for my insurance needs for other properties that I buy.” – V. Pai.
“What a fantastic experience! A REAL person answered the phone. I called back with questions 4 times, and all 4 times, Alexander Park answered the phone and answered my questions thoroughly. Alexander Park was outstanding to deal with! Thank you, Obie Insurance!” – F. Cerbone.
Obie is reinventing the insurance process for landlords and rental property investors. Whether you're a seasoned investor or just starting out, Obie makes requesting a quote and getting coverage simple, affordable, and transparent.
Click here to enter your property address and get an instant quote for landlord insurance in Illinois. No paper applications, week-long waits for quotes, or back and forths with brokers. On average, landlords save 25% with Obie.
Owning a rental property can be a lucrative investment, but it also has its fair share of risks. That's why it's vital to have landlord insurance in Ohio, which can help protect you from financial losses if something goes wrong.
This blog post will discuss what landlord insurance is and why you need it, and some of the specific coverage options available. So if you're thinking about buying or renting out a property in Ohio, be sure to read on!
As a landlord, you know that insurance is vital for protecting your investment. But with so many different types of coverage available, it can be challenging to know what kind of policy is right for your rental property in Ohio.
First and foremost, you should consider purchasing landlord insurance to cover the property and potential liability. Covered claims may include the cost of repairs if your rental unit is damaged by fire, theft, or accidents. In addition, a few optional types of coverage are available, such as loss of rent insurance, which can help offset your financial losses if your unit becomes uninhabitable due to damage. However, loss of rent coverage isn't always part of the standard coverage in a landlord insurance policy, so it's a good idea to check with your insurance broker or review your policy documents.
As a landlord or property manager, it's also important to be aware of the typical weather perils in your area. In Ohio, the most common risks include severe thunderstorms, high winds, flooding, and winter storms.
While you can't control the weather, landlord insurance can help protect you from financial responsibility if your property is damaged by weather or other hazards. As a landlord, you are responsible for maintaining a safe and secure environment for your tenants.
You can also take proactive steps to prepare your property for these hazards. For example, you can trim trees to reduce the risk of damage from falling branches during a thunderstorm. You can also install gutter guards to help prevent flooding. And in winter, it's crucial to clear sidewalks and parking lots to help prevent slip-and-fall accidents.
Landlord insurance rates in Ohio can vary significantly depending on the property's location. For example, rates in large cities like Cleveland and Cincinnati may be higher than in smaller towns due to the increased risk of property damage or theft. Some areas may also have a greater likelihood of damage from fires, severe weather, and natural disasters.
However, many factors can affect rates, so it's essential to compare quotes from different insurers before choosing a policy. By shopping around, landlords in Ohio can find the best coverage for rental property at the most affordable price.
There are a few key things to keep in mind regarding landlord insurance in Ohio.
First and foremost, you'll want to make sure that your policy covers the replacement value of your property in the event of damage. Secondly, you'll want to ensure that your policy provides coverage for loss of rent if your tenants cannot occupy the property due to a covered claim.
You'll also want to ensure that your policy provides legal liability coverage if someone is injured on your property. Finally, it's important to consider the deductibles and limits of your policy to make sure that it meets your needs.
But with so many options available, how do you know which policy is best for you?
One way to find landlord insurance is through an insurance agent. An agent can help you understand the different coverage options and find a policy that meets your needs. However, it's important to remember that not all agents are created equal. Some may only work with a limited number of coverage options or represent only one insurance carrier, which could restrict your choices for landlord insurance.
Another option is to use an online insurance broker like Obie.
One of the most significant advantages of buying landlord insurance online with Obie rather than an agent working for a specific carrier is that you have access to a broader range of options for excellent coverage.
Obie streamlines landlord insurance, offering instant quotes in all 50 states. Getting a quote and purchasing a policy online is faster than ever before, making it easy to get covered and protect your investment. In addition, people save an average of 25% when getting their property insurance through Obie.
Insurance brokers represent multiple carriers, so they can provide you with quotes from multiple companies. This gives you a better chance of finding the policy that best meets your needs and budget. In addition, online insurance brokers can often offer insights and advice that captive agents may not be able to provide.
Ultimately, deciding which type of agent to work with comes down to personal preference. For example, some landlords prefer the convenience and flexibility of working with an insurance broker, while others prefer to work with a captive agent.
Whatever your preference, be sure to compare quotes from multiple carriers and read customer testimonials before making a final decision. Doing so helps ensure that you're getting the best possible coverage at the most affordable price.
Reading what a company’s current customers have to say can provide valuable insights before making an important decision such as buying landlord insurance. When it comes to insuring rental property in Ohio, it’s worth taking a moment to read what Obie customers are saying:
“I can't believe anyone would use another insurance company. Great rate and easiest experience ever. Obie will be my insurance company of choice for my portfolio of real estate investments.” – G. Segal.
“What an easy and professional experience! I worked with Doug Bell. He was amazing. Great rate! Fast response!” – Esther L.
“Very impressed with this company! Shoutout to Ryan S, Brian H, and Lauren M!” – J. Talasazan.
If you own rental property in Ohio, you know how important it is to have insurance. But with so many options available, it can be tough to find the right policy at the right price.
That’s where Obie comes in. Obie offers instant insurance specifically built for landlords and real estate investors. No paper applications, week-long waits for quotes, or back and forths with brokers.
So what are you waiting for? Get an instant quote for landlord insurance from Obie today.
Most landlords have one or two properties in their portfolio. For others, investing in real estate is a full-time business where they have several rental units in their property portfolio. So, how do you deal with insurance for your multiple properties?
Perhaps you have more than five units spread across different neighborhoods or cities. Do you have to get landlord insurance for each property? Or can you use a single coverage for all the rental units?
By the end of this article, you will better understand how to insure multiple properties and where to find the best landlord insurance.
Looking to protect yourself and your investments? Get an instant quote from Obie today. No paper applications, week-long waits for quotes, or back and forths with brokers. On average, landlords save 25% with Obie.
Real estate investing involves numerous risks, from theft and vandalism to fire and damages caused by natural disasters. You never know when these will strike. And when and if there is a disaster, woe unto you if you have to pay for all repairs out of pocket.
Having the wrong insurance or coverage or using a homeowners policy for rental property could bring your real estate investing career to a screeching halt.
Those are just some of the many reasons landlord insurance is so critical for rental property owners.
Your homeowner's insurance policy will only work if you still reside in the property. Once you rent your home out, landlord insurance is required. It protects against risks associated with rental properties.
This covers damages to the property's structure and your contents, like furniture and appliances. The damages could result from accidental fire, vandalism, natural disasters, and irresponsible tenants.
Although most insurance plans provide protection against these damages, not every policy out there offers the actual replacement cost you'd incur. Some provide actual cash value or a predetermined lump sum amount to cover the damages, which might not be enough to replace your property to its initial state using today’s prices.
If a disaster occurs and your property becomes uninhabitable for the residents for an extended period of time, how much rental income would you lose, and could you keep paying the bills? Between the loss of rental income and the costs of getting your property back on its “feet,” reimbursement for the loss of rent revenue could come in handy.
Liability coverage offers protection against legal and medical payments if a third party is injured on your property and you are found liable for the damages. For example, a guest of your tenant could slip and fall and decide to sue you for negligence, or you could unknowingly hire a contractor or handyman who is uninsured.
In addition to the three essential covers, landlords can consider adding insurance coverage such as:
If you're a landlord or property manager, you know that insurance is vital for protecting your investment. But what if you have multiple properties? Can you have one insurance policy for all of them? The answer is yes!
There are a few different ways to insure multiple properties under one policy. First, you can add them as scheduled items, which means each property is specifically listed on the policy.
Alternatively, you can add them as an endorsement, which adds coverage for the additional properties without specifically listing them. You can also purchase a blanket policy, which covers multiple properties with one limit of liability.
Regardless of the method used, having an insurance policy for multiple properties helps you:
The exact number of properties you can put under this coverage varies between insurance companies. However, most insurers have this multi-property coverage available for real estate investors with more than four properties as a rule of thumb.
In addition to saving time and money by bundling many properties under one coverage, a multi-property policy will offer the same protection as the landlord insurance for a single property. You will receive protection against damage from fire, covered natural causes, vandalism, loss of income, and liability.
As you shop for the best portfolio insurance, there are several factors to keep in mind:
By keeping these things in mind, you can choose a landlord insurance policy that will give you the protection you need at a price you can afford.
If you like the idea of insuring multiple properties under the same carrier, be sure to look for the best landlord insurance. In addition to having the right coverage at the right price, look for a company with excellent customer support and a reputation for a positive claims experience.
There are a few different options to consider when looking for landlord insurance for multiple properties, each with its own set of pros and cons.
It can be confusing and time consuming to figure out the exact amount and type of coverage you need for rental property, which is one of the main reasons investors turn to Obie for the property insurance needs. If you own 10 or more properties, contact the Obie private client team and ask for a master policy.
Ultimately, the best option for finding landlord insurance will depend on your specific needs and preferences.
When it comes to protecting your investment in rental properties, landlord insurance is a must. And when you have multiple properties, buying coverage from a single insurer can save you time and money. In addition to securing the same protection as a regular landlord policy, multi-property policies offer additional benefits like added flexibility and convenience.
To find the best deal on landlord insurance for multiple properties, be sure to compare rates and coverage options from multiple insurers. And when you’re ready to purchase a policy, working with an online insurance broker like Obie is the simplest and most convenient way to get the coverage you need.
While short-term rental properties can be an attractive way to generate income, investors frequently face a dilemma when it comes to handling insurance issues.
For example, what would happen if a guest stole a precious art collection, “borrowed” your brand new big screen TV, or had a slip and fall and decided to sue you for negligence? Would your current insurance policy protect you in case of a liability suit?
Situations like these can be all too real for real estate investors, but fortunately, there are insurance policies specifically designed to cover the risks of short-term rental properties.
This article will delve deeper into the meaning of short-term rental insurance, how it works, why you need it, and some of the best insurers you can use.
Looking to protect yourself and your investment? Get an instant quote from Obie today. No paper applications, week-long waits for quotes, or back and forths with brokers. On average, landlords save 25% with Obie.
Short-term rental insurance covers individuals renting their property or a part of it on a short-term basis. For instance, staying in a cozy, homey place with great amenities when traveling has become a popular alternative to boring and expensive hotel rooms.
Online rental platforms like Airbnb, have made it possible for property owners (known as hosts) to turn their second homes into short-term vacation rentals by renting them out for shorter periods like days or weeks.
Short-term rental insurance comes in handy when there are damages to your dwelling, including fixtures and fittings, stolen items, loss of income when the property is uninhabitable, and a liability claim due to injuries sustained due to negligence on your part.
Depending on the insurance carrier, there may also be optional coverage for situations such as excessive use of utilities and liquor liability coverage. Coverage in the event a short-term renter consumes alcohol you had on the premises and is injured. Some insurers might even cover damages from identity theft, i.e., when someone steals your identity and uses it to access your online rental accounts.
Short-term rental insurance coverage can stand alone. However, some insurers might offer it as a rider or endorsement of your current homeowners or an existing landlord policy.
Many individuals entering the short-term rental business assume that their existing homeowners insurance policy is enough, until they have a rowdy guest for a weekend and are left with broken furniture or other personal property or damage to the property's structure and a hefty bill.
Turning your home into a short-term rental unit makes it a business venture. Homeowners policies only apply where the landlord is not collecting income from anyone residing on the property.
On the other hand, landlord insurance covers real estate investors with long-term tenants (i.e. those who stay a year or more).
As you can see, both homeowners and landlord insurance coverages are meant for specific niches, long-term real estate investors, and owner-occupied properties. This, of course, leaves a gap for investors in the short-term rental business.
If any damages happened to your property or an injured guest sued you for negligence, it is likely neither of these insurance options would cover these expenses. That's where short-term landlord insurance comes in— to offer you protection in the case of damage caused by short-term stay guests.
With any type of insurance coverage, it is crucial to have the right insurance company watching your back. You certainly don't want to be faced with debt from having to make repairs to your rental property or replacing personal belongings within it because you didn’t have the right insurance policy with the right insurance company.
Here is a list of the 10 best short-term rental insurers for you to consider:
Finding the right insurer is not an easy task. One option is to work with your existing insurance agent, but that can take a lot of time, and it is difficult to compare different short-term rental insurance policies side by side.
A better way to shop for landlord insurance for a short-term rental property is using an online resource like Obie.
Obie allows you to obtain insurance for your short-term rental property quickly and easily, ideal for real estate investors and landlords. You won't have to waste hours attempting to figure everything out yourself since Obie's simple quote request process will match you with the right insurance for your short-term rental.
Enter the property address and get an instant quote online for landlord insurance. Coverage is available in all 50 states, and investors have insured more than $4 billion in property with Obie to date.
Obie gives landlords and investors complete insight into the insurance procedure, saving them time and money. Consider switching if you already have landlord insurance with another provider. Obie clients typically save 25% compared to their prior carrier!
You may feel the urge to shop around for the best insurance. One way you can do so, and spend less time is using a service that compares quotes for you, like Obie. Go here to get an instant quote today.
Allstate Insurance offers comprehensive protection for landlords with short-term and vacation rental property, whether you're renting out a condo, townhouse, or house. Allstate's Short-Term Rental Property Insurance covers liability, property damage, loss of income, and more. And if you have any damage from a hurricane, tornado, or another natural disaster, Allstate will cover it as well.
American Family Insurance offers a variety of landlord insurance options for those with vacation rental property. They have an extensive list of covered perils, including damage from weather events, fire, theft, and vandalism. In addition, they offer coverage for loss of rent due to a covered event. This is important coverage for landlords, as it can help offset the cost of repairs if your property is damaged and can’t be rented out for a time.
American Family Insurance also offers convenient online tools, such as a Vacation Rental Property Calculator, that can help you determine the amount of coverage you need. Landlords with vacation rental property should consider American Family Insurance when shopping for landlord insurance.
As a landlord, you know that safeguarding your property is key to maintaining a successful business. American Modern gives investors the peace of mind that comes with knowing your property is appropriately protected. The company offers insurance solutions tailored specifically for short-term and vacation rental property landlords. Comprehensive policies cover everything from damage caused by tenants to loss of income due to unoccupied units.
CBIZ has years of experience insuring vacation rental properties, so the company knows what it takes to protect your investment. Short-term rental policies are designed to cover all potential risks of renting out your property, including damage to the property itself, liability for injuries that occur on the premises, and loss of income if your property is uninhabitable due to a covered event. In addition, CBIZ offers 24/7 claim reporting and will work with you to help get your property repaired or replaced as quickly as possible.
Farmers Insurance can be a good choice for insuring vacation rental property for several reasons. First, they have a long history of insuring rental property, so they understand the unique risks of this type of property. They also offer a variety of coverage options that can be tailored to the specific needs of your rental property. In addition, Farmers offers competitive rates and discounts for landlords with multiple properties. Lastly, their customer service has an excellent reputation, and they are always available to answer any questions you may have about your policy.
Foremost (a Farmers Insurance Company) has over 50 years of experience insuring vacant and tenant-occupied properties, and their team of experts understands the unique risks associated with short-term rentals. The company is well known for its industry-leading coverage and claims process, which makes it a great option to consider for those with rental property. In addition, Foremost offers many discounts for landlords who insure multiple properties or who have their property professionally managed.
Nationwide offers comprehensive protection for landlords with short-term and vacation rental property. They are a well-respected company with a long history of providing quality coverage. Their policies are designed to protect your investment and give you peace of mind. They offer competitive rates and flexible payment options. You can customize your policy to fit your specific needs. They also have 24/7 customer service and a team of professional agents who are always ready to help.
As a landlord, you understand the importance of insuring your property. But when it comes to short-term and vacation rentals, you need coverage specifically designed for this type of property. That's where Progressive Insurance comes in. The company offers comprehensive protection for landlords with short-term rentals, including coverage for damages caused by tenants and third-party guests. In addition, policies include liability protection if a tenant or guest is injured on your property.
While there are many different insurance options available, Proper Insurance offers a unique combination of features that may make it ideal for landlords. For starters, the company offers flexible coverage options that can be customized to meet your specific needs. Additionally, Proper has a team of experienced underwriters familiar with the risks associated with short-term rentals and can offer competitive rates and comprehensive coverage.
Investing in short-term rentals can be an excellent way to maximize returns on your properties. But like any other real estate investment, it is crucial to get the right insurance.
In most cases, your landlord or homeowners insurance policies will not cover any damages when guests stay for short periods. Luckily, short-term insurance policies are available for this niche. Numerous insurers have made it easier to manage your short-term rental insurance needs online. The above list is not exhaustive but provides some of the best insurers to consider.
Once you decide to rent out a home, you'll need different insurance. New landlords sometimes do not realize that existing homeowners insurance coverage for a primary residence may result in a claim being denied once the property is turned into a rental.
Keep reading to learn how much landlord insurance you need for a rental property. This article will discuss the main types of landlord insurance coverage, how landlord insurance differs from homeowners insurance, and the best places to find landlord insurance for rental property.
Landlord insurance provides an extra layer of protection when you own and operate rental property. While all landlord insurance policies are different, there are 3 main types of coverage to consider:
Covers the physical structure of the rental home, including:
Although this coverage provides protection for damages to your rental property, including personal property used to service the home, it does not cover damages from normal equipment breakdown or maintenance costs.
It also does not apply to any shared property. If you live in the home and rent an extra room, it would be best to consult your insurance agent and see whether that rented space can be covered under your homeowners coverage. The property insurance coverage only applies to non-owner-occupied rental properties.
Liability coverage is critical when the tenant or a third party is injured on your property. For example, let's say the railings on the property were faulty, and someone fell and got injured. If you are found liable for damages, your liability coverage can pay for medical bills and legal costs up to your coverage limit.
This coverage provides temporary rental income reimbursements should your property become uninhabitable. It could be fire, smoke, windstorm, water damage, broken water pipes, AC leak, a natural disaster, or other things beyond your control. However, the property needs to be occupied when it is declared uninhabitable for you to claim from the insurer.
The specific amount of landlord insurance coverage needed varies from property to property and from one investor to another.
In the worst-case scenario, you may wish to consider how much money it would take to rebuild your property after damage. Factors affecting a landlord insurance premium include the type of structure insured and the deductible amount.
Here are a couple of rules of thumb to follow when deciding how much landlord insurance you may need.
First, you need to estimate how much it would cost to replace the rental structure. Note that the keyword here is “structure.” That’s because a landlord insurance policy provides coverage for the structure or building and improvements, but not the land the property is sitting on.
For example, if the total value of your rental property is $300,000 and the land value is $50,000, you would need to insure the property for $250,000. An easy way to know how much the building alone is worth is to look at your tax records or a recent appraisal made when the property was purchased. The assessment will have the cost of the land separate from that of improvements (buildings).
That said, keep in mind that, unlike land, buildings depreciate, and the value on your tax records is not necessarily the correct representation of how much you would need for repairs. So instead, think about the present value and factor in inflation rates.
To illustrate, assume your property is worth $250,000 according to the most recent tax records. However, due to rapidly rising home values, your home's current fair market value is actually $325,000. Therefore, if a disaster strikes and your property needs to be entirely rebuilt, you would need $325,000 in coverage versus the amount listed by the county assessor’s office.
That's why it's crucial to work with a company that offers a variety of transparent insurance plans. Having too much coverage could be as bad as having too little because you’ll be paying higher premiums but will only receive payment for what it costs to rebuild your home if and when a claim is made.
Liability coverage and loss of rental income are harder to determine compared to property coverage, where it is easier to calculate the cost of construction materials.
For example, how much would it cost to mend a broken leg and pay legal fees if someone fell on your property? Or, how much rental income would be lost if your property was severely damaged and making the home habitable again took several months?
The amount of liability and loss of rental income coverage you may require depends on factors such as the extent of an injury and liability in the event of a lawsuit and how much capital you are holding in a reserve account for when there is no rental income coming in. As a rule of thumb, it is best to consider taking liability coverage that is high enough to cover serious injury lawsuits and fits within your financial ability.
Also, how many tenants or properties you have will significantly affect how much liability coverage you need. The more tenants there are, the more potential risk there is and the more coverage you will need. For instance, landlords with 1 to 4 units tend to take liability coverage worth $1,000,000. If you have more units, the chances of a lawsuit increase, meaning you need more coverage.
While both homeowners insurance and landlord insurance provide coverage for a home, they are used for different purposes.
A homeowner policy is used for a primary residence occupied by a homeowner. In some cases, coverage may also be available for a guest room rented out or short-term rental arrangements where you rent out the home when you are away on vacation.
On the other hand, landlord insurance is a policy that provides protection for property not occupied as a primary residence, such as a single-family rental home, townhome or condominium, or a short-term vacation rental.
Another difference between homeowner and landlord policies is the cost of coverage. As a rule of thumb, insurance for a rental property is about 25% more than a standard homeowners insurance policy.
However, landlord insurance premiums can vary quite a bit, typically from $800 to $3,000 per year for a 3 bed/2 bath single-family rental depending on the state, because every home is unique and every landlord has different coverage needs.
An excellent way to get a free instant quote online for landlord insurance is with Obie.
Obie offers instant insurance specifically designed for landlords and real estate investors. Landlord insurance is available through Obie for rental property in all 50 states, and investors have insured more than $4 billion in property to date.
There are several ways to find the best landlord insurance coverage for your property. These include:
The internet never runs dry of information, including information on insurance matters. A simple online search will give you information about insurers like Obie, which offers landlord insurance.
You can request a landlord insurance quote and obtain simple, affordable, and transparent coverage entirely online. Best of all, there are no paper applications to deal with and no lengthy waits.
Simply answer a few property questions and get the right insurance and coverage for single-family rental property, multifamily buildings with 2-4 units, short-term rentals, and condominium units based on your specific needs.
Another option for finding landlord insurance is through your current insurance agent or broker. This may be the path of least resistance because you don't have to do much research or compare numerous quotes from multiple carriers by yourself.
However, while this may be the easiest option, it isn't necessarily the best way to find landlord insurance. Some companies compete on price by giving you minimal coverage and minimal customer service if and when a claim is filed.
Do you know a friend or relative who has converted their residential home into a rental? Chances are they already have landlord insurance coverage. They can share their experiences with insurers and lessons learned and might even recommend coverage or an agent they have used.
Networking with other individuals in the real estate industry can be an excellent opportunity to find the best landlord insurance. Visit property expos and look for groups with other landlords on social media to join.
Landlord insurance is a must-have once your residential home becomes a rental. How much coverage you need, though, will depend on many factors.
How much would it take to rebuild your house if it was ravaged by fire? Or how much do you think it would cost in medical and legal fees if someone is severely injured on your property?
Knowing this can help you estimate how much landlord insurance you need. It is also best to get a professional insurance company to help you find a policy that doesn't leave you exposed.
Investing in real estate comes with a handful of responsibilities, including keeping your rental property in good condition and protecting the value of your investment.
While having the right landlord insurance policy in place is vital for owning a rental property, finding the best landlord insurance coverage can sometimes be challenging. This article is intended to make your research a little easier!
Keep reading to learn more about finding the best landlord insurance and some of the top companies to consider when purchasing insurance for a rental property. At the end of this article, we'll cover some of the frequently asked questions real estate investors have about landlord insurance for rental property.
Looking to protect yourself and your investment? Get an instant quote from Obie today. No paper applications, week-long waits for quotes, or back and forth with brokers. On average, landlords save 25% with Obie.
Finding the best landlord insurance for your rental property can be more complicated than looking for homeowners insurance because so many options are available.
It's essential to spend enough time researching insurance coverage online, getting multiple quotes, comparing them side by side, and looking for discounts that can save you money and increase your potential return on investment.
Obie offers instant insurance built for landlords and real estate investors, so you can get the coverage you need for your specific property without spending countless hours trying to figure everything out yourself.
Enter the property address and get an instant quote online for landlord insurance for properties with one to four units. Coverage is available in all 50 states and investors have insured more than $4 billion in property with Obie to date.
Obie provides full transparency into the insurance process, saving landlords and investors time and money. If you already have landlord insurance with another carrier, consider switching. On average, people can save up to 25% with Obie.
Although Obie is a great way to find the best landlord insurance online, you may prefer to shop for quotes yourself. Here are some of the top landlord insurance providers for rental property, listed in alphabetical order, according to research from Bankrate, Investopedia, The Ascent, and Value Penguin.
Allstate Insurance Corporation was founded in 1931. It has an A+ Financial Strength Rating from AM Best and an AA- from S&P Global Rating. The company is known for its affordable coverages, including landlord coverage.
Its coverage includes damages to the property's structure, additional structures, loss of income, medical protection, burglary, vandalism, and liability claims. It also consists of a building code policy that applies when you are fixing the unit, and there are applicable costs to meet building codes.
In addition, you can get coverage when your rental unit is undergoing renovations, or you are constructing a new rental unit. Additional coverage you can consider includes flood insurance and personal umbrella insurance.
While you cannot get a quote online, there is an online search you can use to find a local agent to help you. You can also use its online tool to search for common and expensive claims in your area. Knowing about potential claims can help you prepare better and add additional policies before purchasing your coverage. Most importantly, you can enjoy discounts that lower your insurance costs, such as bundling policies.
Liberty Mutual Group is over 100 years old and has made a name for itself since it was founded in 1912, becoming the country's sixth-largest casualty and property insurer.
We live in the digital era, and Liberty Mutual saves you time by providing a quote for any insurance needs on its website. This service even allows you to bundle two types of coverage together. In addition, the carrier has an A rating from both AM Best and S&P and offers various coverage options.
You can call for a customized quote that meets your specific needs for starters. Its landlord insurance provides coverage against the property's structure, loss of rent, and liability claims. In addition, it has 24-hour claims assistance.
But perhaps what makes their option worth considering is that you can have an inflation protection add-on. Inflation protection add-on automatically increases your coverage over time to reflect rising costs of materials and labor. But, of course, any add-on to the standard coverage will come at an additional cost in your premium.
In addition, you get to enjoy discounts when:
State Farm Insurance was founded in 1922 and has grown over the century into a powerhouse with an AA S&P Global Rating and AM Best's A++ Financial Strength Rating. It offers various financial services, including banking, investing, and insurance.
It offers several insurance coverages for homes and properties. Its rental dwelling policy is a good option to consider if you rent out a single or multi-family home unit. If you have a condo or an apartment unit, the rental condo unit owners' policy and insurance for landlords are great.
Whichever policy option you have, you will still enjoy coverage against structural damages, damage to additional structures attached to the property, personal property damages, theft, liability claims, and loss of income. The coverage also includes law or ordinance coverage, which protects against loss of value or the rise of costs arising from enforcement of an ordinance or municipality laws that regulate the repairing or the construction of damaged properties.
You can add more coverage to ensure you are protected against any additional risks. However, this will incur more expenses, raising your premiums perhaps more than anticipated. State Farm also offers online services, like getting an agent nearby, direct quotes, and paying your insurance bills automatically.
Travelers Insurance, or The Travelers Companies, Inc., was founded in 1853 and is one of the oldest insurance institutions in the United States. More than 165 years later, the company still ranks as one of the best insurers, with an A++ Financial Strength Rating (FSR) from AM Best.
Its landlord insurance coverage is aimed at landlords with one to four rental property units like condos, apartments, and family homes (single or multi). It provides the usual structural damage coverage and covers additional structures like garages and sheds, and covers theft and loss of income.
In addition, if you are renting a furnished unit with furniture and appliances, the policy will provide coverage against damage to these.
Travelers can also help you find a professional agent close to you through their website. This can help you save time searching for a local insurance agent to work with.
The above list of landlord insurance companies is by no means exhaustive. Other options to consider when looking for insurance for your rental property include:
Yes. If you plan to make money by renting out a home, homeowner's insurance will no longer apply. Unlike the homeowner’s coverage, landlord insurance can include additional liability and loss of rental income.
Apart from the covered risks that are more extensive with landlord coverage, it also matters who resides on the property. A homeowner’s insurance policy will still apply if the rental is your primary residence. Perhaps you have converted a room or two while still living on the property. But if you rent the entire property and no longer reside there, you should have landlord insurance.
Although landlord insurance costs vary between insurers, some common factors affect your policy price:
Yes, landlord insurance has some exclusions. For example, although it covers damages to the property's structure, it does not cover repairs, updates, and maintenance costs. It also excludes:
The best landlord insurance is different for every real estate investor. That’s why it’s important to research and compare quotes to find the right insurance for your rental property. Choosing the best insurance policy for a rental property is about more than price. Consider coverage limits and exclusions, how customizable a policy is, and how transparent the entire process is.
If you’re looking for an easy way to protect yourself and your investment, get an instant quote from Obie today. No paper applications, week-long waits for quotes, or back and forths with brokers. On average, landlords save 25% with Obie.
Real estate investors spend a lot of time, money, and effort finding the right rental property, screening tenants, and taking care of and making upgrades to the property to maximize return on investment.
A key part of owning rental property is having the right landlord insurance coverage to help protect your valuable investment.
However, it can be challenging to find the right policy coverage at the best price, especially given the number of insurance carriers there are to choose from. Similar to a typical homeowners policy, landlord insurance for rental property comes in all shapes and sizes, with different pay-out options and types of coverage.
This article sheds more light on how much landlord insurance costs, the factors affecting the annual premium for landlord insurance, and the different coverage options available. Let’s begin by discussing the three main risk categories covered by landlord insurance.
A landlord policy covers three main categories of risk.
1. Property Damage: Covers damages to the property's structure caused by natural disasters, vandalism, or intentional damage caused by a tenant due to negligence or during an eviction.
2. General Liability: Claims a landlord may face from injuries to a tenant, a tenant’s guest, or a neighbor. As a rule of thumb, covered costs can include medical expenses, legal fees, costs to settle a lawsuit, and funeral costs.
3. Loss of Income: One of the main reasons investors purchase rental property is for the recurring income stream. But sometimes, things like natural disasters can leave the property uninhabitable. Landlord insurance may reimburse a landlord for lost income when the property is being repaired, and a new tenant is located.
Additionally, you could add extra coverage or riders to your policy to cover claims arising from flooding, water backup, natural disasters, personal items used in a rental property – such as furniture and appliances owned by the landlord – and more.
A common question that many beginning real estate investors have is whether landlord insurance is really necessary when a homeowners insurance policy is already in place.
The answer is yes because the property is rented to somebody else instead of being used as the primary residence for the owner. If a homeowners insurance claim is made on a property that is really being used as a rental there’s the very real risk that coverage may be denied when the claims adjuster discovers the home is renter-occupied.
Although the two types of insurance coverage have many things in common, there are several items landlord insurance covers that homeowners insurance does not:
As a rule of thumb, landlord insurance currently runs about 25% more than a standard homeowners insurance policy. However, insurance for rental property can vary quite a bit (from $800 to $3,000 per year for a 3 bed/2 bath single-family rental, depending on the state), simply because every home is unique and every landlord has different coverage needs.
An excellent way to get a free instant quote online for landlord insurance is with Obie.
Obie offers instant insurance specifically built for landlords and real estate investors. Landlord insurance through Obie is available in all 50 states, and investors have insured more than $4 billion in property to date.
When shopping around for a landlord insurance quote, there are several factors insurers consider when calculating a premium, including:
It is important to remember that the more comprehensive you need your landlord insurance to be, the pricier it will get. Therefore, it is crucial to go through the provided policy to ensure it covers the risks your property faces.
Some companies compete on price by giving you minimal coverage that might save you a few dollars upfront but may cost you dearly when and if a claim occurs.
Buying a landlord insurance policy might seem complicated, given the wide variety of coverage options available. However, purchasing insurance written explicitly for a rental property is necessary for investing in real estate.
A landlord insurance policy will help shield you against risks that could cost you a lot of money to repair damages on the property's structure and legal fees for claims against you.
For example, let's say your tenant or a guest is injured at your property and decides to file a claim against you. This could include their medical costs, settlement fees, legal costs, loss of income for missed work, and mental duress.
Without the right landlord insurance coverage, you might have to pay for these claims from your hard-earned savings. Fortunately, a comprehensive landlord insurance policy with liability coverage will take care of these costs and save you from the possibility of losing your investment when faced with such incidents.
That's just one example. A landlord insurance policy also protects against burglary, vandalism, theft by tenants, damages arising from natural disasters, and loss of rental income. So you can rest easy and run your business knowing your investment is insured against a myriad of risks.
As you can see, buying landlord insurance requires some time and energy. But here are a few tips to help you ease the process of choosing the best insurer:
There are three landlord insurance categories, often referred to as dwelling policies (DP). You will see insurers showing packages under DP-1, DP-2, and DP-3. DP-1 are often offered at a low rate due to often excluding general liability, leaving gaps in policy coverage. DP-2 is more comprehensive and could extend to damages from natural disasters, while DP-3 is the most comprehensive and pricier. DP-3 covers every peril unless otherwise stated. Ensure you are aware of what risks your preferred category covers and excludes.
Do not settle for the first insurance company you stumble upon while researching. Get quotes from different insurers and compare the premiums and coverage. One insurer might have a pricier premium but provide you with more value that helps mitigate most of the risks. The end goal is to have an affordable policy covering as many risks as possible.
You can take the time to call several companies, or have Obie provide a quote from the many carriers they work with.
They say that the 'devil is in the details,” so it's essential to work with an insurance broker that specializes in providing insurance for landlords and rental property investors.
Any type of insurance can be tricky to understand because there is a lot of detail. Somewhere among all the industry jargon, many landlords misunderstand some of the terms and conditions and basic descriptions of their policy, only to realize later that they have made a mistake. The best landlord insurance broker will work hard to match you with the right insurance for your rental that best meets your needs.
Depending on the landlord-tenant laws where a rental property is located, a landlord may be able to require a tenant to obtain a renters insurance policy before moving in.
Sometimes known as tenant insurance, renters insurance is paid for by a tenant. It provides coverage for loss of personal property, liability for damage caused or a guest's injuries, and additional living expenses such as a hotel bill if a rental property becomes temporarily uninhabitable due to damage.
Having landlord insurance is an essential part of owning and operating rental property. While there are countless companies that offer insurance, very few specialize in insuring landlords. The best landlord insurance company will help you find the right policy for your specific needs, with affordable transparent coverage and customized pricing plans to help reduce risk and protect you from the unexpected.
In the real estate business, “things happen,” and not having the right insurance coverage could result in significant financial damage.
Investors spend a fair amount of time searching for the best landlord insurance and reviewing various coverage options. However, the fact of the matter is that insurance policy language and fine print can be confusing even to the most experienced investors. Just as every rental property is unique, and so are an individual investor’s insurance needs.
In this article, you will learn about the different types of insurance for real estate investors so you can decide which ones are right for your specific needs.
Looking to protect yourself and your investment? Get an instant quote from Obie today. No paper applications, week-long waits for quotes, or back and forths with brokers. On average, people save 25% with Obie.
A standard homeowners insurance policy and a landlord insurance policy for rental property have many coverages in common, but how the home is being used is what differentiates the two.
Landlord insurance provides coverage for liability and damages when a property is rented to a tenant. In contrast, homeowners insurance provides coverage for an owner-occupied primary residence.
Having the right insurance for rental property can protect against unanticipated and potentially devastating losses from things like a tenant’s slip-and-fall claim or a natural disaster.
The challenge is choosing the right type of insurance for your rental property because every property and investor has different needs. For example, a home located in a coastal area may require extra coverage for damage or flooding caused by a hurricane. Or, an investor with significant capital reserves may opt for a higher deductible to help keep policy costs low.
The right insurance coverage is a critical part of owning and operating a rental property. Having too much insurance coverage may unnecessarily increase operating expenses and decrease potential returns, while the wrong coverage may lead to having a claim denied.
That’s why it’s vital to protect yourself and your investment by working with an insurance broker specializing in policies for landlords and real estate investors.
While every investment property and investor situation is unique, here are 10 types of insurance coverage to consider.
Covers damages from fire and hazards, including water, lightning, smoke, explosion, storms - ice, sleet, and snow. However, one thing to keep in mind is whether the compensation from a claim will be enough to cover the damage.
Rising property values and increasing inflation could result in insufficient coverage the following year or even within a few months of buying the policy. That is why many in real estate investing opt for the total replacement cost of the property instead of its current cash value when the claim is made.
Imagine a tenant, guest of a tenant, or repair person was injured at your property and decides to file a lawsuit. As the property owner, you could be liable for paying out a significant amount of money to the injured party for medical expenses, missed work, and mental duress, among other damages.
That’s where liability coverage comes in. It protects you against risks of injury or damages that occur on your property. Liability insurance will cover the pay-out and legal costs if you are found liable for these damages. When purchasing landlord insurance, be sure to choose a high enough liability limit so that all costs are covered.
A standard hazard insurance policy helps protect you against water damage on your property. For example, it could be from a broken pipe. But what happens if your house floods due to heavy rains? Flood insurance is best (and may be required if you have a mortgage) if you have a rental property in an area designated as a flood zone or are worried a natural occurrence like a hurricane could lead to flooding.
Additional coverage for sewer backup can usually be added to a landlord insurance policy at a minimal cost. Sump overflow coverage is also recommended in geographies with basements.
In many municipalities, the owner is responsible for maintaining any part of the sewer line that is on the property. A backed-up sewer can quickly render a single-family rental home uninhabitable and inconvenience all tenants in a multifamily building.
Whether you are a real estate investor with a single property or an extensive portfolio, you likely rely on the rental income. So, what happens if a disaster or peril covered in your insurance policy renders your rental property uninhabitable for a significant period?
It means you’ll endure months of no cash inflows. Loss of income insurance comes in handy here as it provides you with compensation for when you cannot rent the property following a catastrophic event, like a fire.
In addition to losing rental income due to a disaster, you could also incur the same loss if you had a tenant skip rent payment for one reason or the other. Unfortunately, things happen in life regardless of how much due diligence you do to ensure you let your property to trustworthy tenants.
If the tenant fails to pay, you could find yourself without the cash inflows. A rent guarantee policy ensures that you receive reimbursement when such happens, so you do not experience an interruption in cash flows.
A worker's compensation policy covers medical care, death, and disability benefits for employees injured at work. It will also protect you as the employer if the employee files a case against you for the injury. Having an insurance policy with worker’s comp coverage is not necessary for all real estate investors. But if you have employees in your business, consider talking to your insurance broker about adding worker's compensation coverage.
If you invest in real estate by buying and renovating houses, you may require builder's risk insurance. Coverage options vary, but as a rule of thumb this insurance may cover claims such as property damage, vandalism, or injuries to crews renovating the home.
Not every investor requires builder’s risk insurance. However, this additional special coverage may be well worth considering for extensive renovations and upgrades lasting longer than 60 days since coverage may be excluded by a regular landlord policy.
Some investors grow their rental property portfolios to the point where they can perform general contracting work independently, such as creating a rehab plan and hiring subcontractors to perform individual pieces of the project. General contractor insurance provides coverage for items such as pulling permits and individuals and companies working under the general contractor.
There may be instances when a standard landlord insurance policy may not be enough to cover damages incurred. For example, the amount needed for an injured person’s medication, rehabilitation, and legal fees is more than your coverage limit. An umbrella policy provides extra insurance that kicks in when coverage from other policies ends.
Getting an insurance policy is one thing, but getting it from an unreliable insurer could be almost as bad as having no coverage at all. That’s why it’s essential to take the time to shop for an insurance broker who can help you choose the right coverage options for landlords and real estate investors.
One of the best ways to go about this is to work with a professional insurance broker who has access to industry-best rates for rental property and casualty plans to help ensure that your investments are protected. In addition, insurance brokers have a fiduciary duty to you, meaning they are mandated by the law to have your best interest in their dealings, not the insurance companies.
A second option is to ask other real estate investors. Hearing about first-hand experiences from others can help you determine whether a specific carrier is the best match for your insurance needs.
Another very efficient way for real estate investors to find insurance is to search online. The internet is a treasure trove of never-ending information, and you can find reviews from other investors and comparisons.
For example, Obie is an excellent source for requesting a landlord insurance quote and obtaining simple, affordable, and transparent coverage entirely online. There are no paper applications and no lengthy waits.
Simply answer a few property questions and get the right insurance and coverage for single-family rental property, multifamily buildings with 2-4 units, short-term rentals, and condominium units based on your specific needs.
Before purchasing landlord insurance, it’s a good idea to compare policies and the coverage included, in addition to the price. That’s because some insurance companies compete on price by giving you minimal coverage and little customer service when filing a claim.
While real estate can be a profitable investment, there are potential risks to keep in mind as well. Having the right insurance policy for your rental property is critical because having the wrong coverage could result in receiving a lower than expected reimbursement or even having a claim denied entirely.
Your goals as an investor and the condition of your property will determine the type of coverage you need. The above types of insurance for real estate investors are an excellent start. Still, it is crucial to work with a professional insurance agent to ensure you get coverage that matches your needs.
Obie and Here have partnered to enable real estate investors to more easily expand their portfolios into the vacation rental market.
Obie believes that partnership is key to further simplifying the insurance process for landlords and real estate investors. Partnership with Here is a perfect compliment to this goal, as their mission is to make investing in short-term rentals approachable and attainable for all. By partnering together, Obie is able to insure properties with Here more quickly and efficiently. This ultimately leads to better customer experience for Here customers.
Insurance should be simple and transparent for investors. By integrating with Here, a platform working to reduce the barriers to entry in real estate investing through fractional ownership in the vacation rental market, we are shaping the future of real estate investing, creating a future where processes are transparent and attainable for all. —Aaron Letzeiser Obie, Co-Founder
Here is a fintech company that has increased accessibility to the short-term rental space. With Here’s first-of-its-kind marketplace, accredited and non-accredited investors are both able to purchase shares of luxury homes and vacation rentals. Investors can expect high yield from the high cash-flow vacation market, while remaining fully passive through fractional ownership. This means lower cost of entry and less time spent managing investments, while still retaining the benefits of direct property ownership, such as depreciation and expense write-offs.
By removing many barriers to entry in the short term rental space, Here is empowering all people to step into real estate investing. They are also increasing agility for current investors, allowing them to easily diversify portfolios and expand into the $1.8 trillion short-term rental market.
Here makes investing easy with their 3-step process. Simply browse their online marketplace to select the SEC securitized properties you want to invest in, fund, and then relax.
Here makes relaxing after you fund your investment especially easy. Their team takes care of all operational responsibilities, including insuring each property through Obie, while you get transferred your returns from the property while also retaining the tax benefits of property ownership.
Obie is providing support and ease to companies with a focus in tech-forward real estate solutions through partnership opportunities. To learn more about how to reduce friction in the process of insuring your assets through partnership with Obie, click here.
Obie has partnered with New Silver to make getting insured simple and quick for real estate investors who have leveraged New Silver’s lending technology. Investors can now get approved and close on a loan with New Silver in seven days and insure their asset instantly with Obie.
Improving the experience of the investor is at the core of both our identities, so the partnership between Obie and New Silver is a natural fit. With this partnership, investors experience a seamless lending and insurance process that removes many frustrations experienced otherwise and will help New Silver close more deals, quickly.
“Securing capital has previously been a cumbersome process involving weeks of waiting and obtaining insurance has historically been a contributor to that slow process. We’re excited to provide those who have secured capital through New Silver the same speed and ease in obtaining the right property insurance. Partnering with New Silver allows us to collaboratively build a better experience for real estate investors that can help to reduce some of the administrative burden for both the originator and borrower.”—Ryan Letzeiser Obie, Co-Founder
“This is a very exciting time for New Silver and Obie. The partnership will allow for investors to have the proper tools to find a property along with easy solutions for insurance coverage to match their property. New Silver is all about simplifying solutions for real estate investors, and we believe this partnership to be the right step in the next direction.” —Kirill Bensonoff New Silver, CEO
New Silver is a private lender for the modern day real estate investor to secure capital. New Silver funds fix and flips, buy and holds, and new construction real estate projects. From their competitive rates to their impeccable speed and agility, New Silver is redefining the borrowing process.
Not only does New Silver make lending quick, but they also make it simple. After applying online, you’ll view loan terms, complete automated underwriting using their proprietary underwriting model. Upon completion, you get approved instantly online with options to personalize your loan. All that’s left upon approval is downloading your proof of funds and completing your appraisal and closing. Taking a once stressful experience and turning it into a painless 6-step process.
New Silver has built technology to originate and underwrite short-term bridge loans with more efficiency. Their automated underwriting model is a proprietary tech advancement that allows for the speed you see in the loan process. New Silver then securitizes those loans on the blockchain with capital from DeFi (Decentralized Finance) protocols. DeFi protocols use computer code to operate within the blockchain, reducing intermediaries and replacing traditional centralized institutions. The use of DeFi protocols helps New Silver further increase efficiency and reduce cost, directly improving the lending experience.
Obie is actively partnering with technology leaders across the proptech and fintech landscape to help independent investors close more deals and see greater returns. Contact our Partnerships Team by clicking here and learn more about how partnering with Obie can add value to your platform.
Obie and Fund That Flip are working together to eliminate the insurance headaches associated with closing on a loan on your investment property.
Fund That Flip is the nation’s leading lender of residential rehab loans — and the fastest-growing real estate fintech marketplace. The platform and team provide funding solutions for real estate entrepreneurs for rehab, new construction, and rental investment projects, and investors can earn up to 9% annual returns by passively investing in fractional shares of those loans.
One of the biggest challenges for real estate entrepreneurs is accessing fast, reliable capital to fund their projects and scale their businesses. Banks can take up to 60 days to close on a property, and they usually don’t want to back a distressed property. Private money lenders can invest their money elsewhere with short notice, or the interest rates can be unsustainable.
Fund That Flip is a relationship-based, hard money lender. By partnering with Fund That Flip, experienced developers can get pre-approved for funding up to $5 million, so they can confidently make winning offers on their next investment property. Because the company is powered by technology, application is easy and behind the scenes, things are happening fast. The team responds in 24 hours for funding commitments, terms are flexible, and every developer gets a dedicated account team for 24/7 support. Plus, deals close in 5 to 7 days. Fund That Flip is using technology and relationships to help real estate entrepreneurs scale their businesses and transform communities.
"Obie is quick, efficient, and competitive in pricing. They're easy to get in touch with, and their process is convenient. They've been a great partner for us and our borrowers." – Jen Sitko, VP of Closing, Fund That Flip
Obie works with lenders like Fund That Flip to alleviate insurance-related headaches for a quick and easy lending process for real estate investors. Especially in today’s market, time kills deals, making speed the competitive advantage for lenders. Therefore, in addition to a team of dedicated account managers supporting Fund That Flip’s borrowers, our technology allows us to store Fund That Flip’s insurance requirements, ensuring each policy is compliant.
"Being introduced to Obie by our lender, Fund That Flip, was the best! We have saved so much time and money with Obie. We would recommend it to anyone." - Dekoro Homes, Real Estate Investor
Obie is reinventing the insurance process for landlords and rental property investors. Whether you’re a seasoned investor or just starting out, Obie makes requesting a quote and getting coverage simple, affordable, and transparent. Obie simplifies the insurance experience by providing instant quotes. No back-and-forth with brokers or surprise costs at signing — the way insurance buying should be.
Obie is teaming up with Roofstock to help streamline investment property transactions. Now Roofstock and Stessa users can get instant insurance quotes in minutes without ever leaving their platforms.
Roofstock is building the world's leading real estate investment marketplace. Their mission is to make ownership of investment real estate radically accessible, cost-effective and simple.
Roofstock lets everyone from first-time investors to global asset managers evaluate, purchase and own residential investment properties with confidence from anywhere in the world. Since launch, they’ve surpassed $4 billion in transactions and continue to disrupt the industry with cutting edge technology and innovations.
Stessa, a Roofstock company, is a free software platform purpose-built to help investors track, manage, and report on their investment properties. Today, more than 100,000 investors use Stessa to track over 190,000 properties, valued at over $50 billion.
Insurance is among the most cumbersome components of getting started in real estate, especially when it comes to optimizing coverage for individual portfolios and budgets. Investors on Roofstock and Stessa can now purchase insurance for their eligible investment property through Obie.
“Transacting on investment properties was a siloed process involving countless vendors and stakeholders. We teamed up with Roofstock because their trailblazing technology creates a seamless experience for purchasing, selling and managing properties. We are excited to be a part of the Roofstock customer journey - helping navigate the complex world of obtaining property insurance - without ever leaving Roofstock or Stessa. Ultimately, Roofstock is opening the doors for more people to build wealth through real estate.”
The entire team at Roofstock has been amazing to work with and we are extremely excited to grow with them and continue serving the real estate investor community.” - Ryan Letzeiser, Co-Founder of Obie
Obie is reinventing the insurance process for landlords and rental property investors. Whether you’re a seasoned investor or just starting out, Obie makes requesting a quote and getting coverage simple, affordable, and transparent. Obie simplifies the insurance experience by providing instant quotes. No back-and-forth with brokers or surprise costs at signing — the way insurance buying should be.
With all the momentum and energy lifting the rental property industry, in particular single family rentals, proptech companies have emerged and partnered together to create an ecosystem that allows the individual investor to have a seamless end-to-end investment experience
Landlords have enough to worry about, from finding tenants to keeping up their property. Insurance and rent shouldn’t be another stressor. With Baselane and Obie’s new partnership, landlords can now keep track of all their expenses and obtain landlord insurance all within Baselane’s platform.
Baselane is an all-in-one banking and financial platform for individual real estate investors and landlords, designed to help them save time, increase returns, and automate their finances. Baselane offers banking, bookkeeping, rent collection, analytics, and more, in one simplified platform.
This partnership provides a seamless and transparent way for investors to purchase or renew insurance policies on their rental properties.
Baselane values its position as a one-stop-shop for financial management for landlords and real estate investors. With Obie’s integration, Baselane customers can do more than ever on the Baselane platform, including obtaining proper insurance at the most competitive rates.
In addition, Obie and Baselane share a mission to simplify investing in and managing rental properties. Both companies aim to help their customers grow their investment portfolios and optimize their finances – together, they can now serve a larger market of landlords on property insurance and financial management.
Obie is reinventing the insurance process for landlords and rental property investors. Whether you’re a seasoned investor or just starting out, Obie makes requesting a quote and getting coverage simple, affordable, and transparent. Obie simplifies the insurance experience by providing instant quotes. No back-and-forth with brokers or surprise costs at signing — the way insurance buying should be.
2021 was anything but normal. For the world, as we entered the second year of the COVID-19 pandemic, and for Obie, as we grew and expanded both our team and our product. Our mission from day one has always been to provide a fast, transparent, and affordable way to buy landlord insurance. To that end, we want to be as honest and open as possible with our customers, our employees, our partners, and our investors. Join us as we reflect on our progress this past year.
This year was an exciting year of growth for Obie. We kicked off the year by closing on our $10.5 million Series A funding, led by Michael Brown and Battery Ventures and followed by Thomvest Ventures and a host of previous investors including Funders Club, Second Century Ventures, and Metaprop.
And from the business side, our growth was exponential. We wrote over $13 million in premium – an increase of 100% from 2020 and an increase of 1,200% from 2019.
As our product grew, so did our brand name. In Q4 of 2021, there was a 480% YoY increase in search volume around Obie and our product. More and more customers are choosing Obie, telling their networks about us, and renewing their policies. In fact, our renewal rate has never been higher, with 95% of customers choosing to stay with Obie for their insurance needs.
Customer satisfaction is one of our main goals. And although customers can get instant quotes through our website without ever having to talk to anyone, our team goes the extra mile to provide exceptional customer service.
We’ve received nearly five stars across the board. Frank C. summed up the Obie experience well: “What a fantastic experience! A real person answered the phone. I called back with questions 4 times and all 4 times Alex answered the phone and answered my questions thoroughly. Thank you, Obie Insurance!”
What a year for partnerships! We are thankful for every single person and partner who has spent time reviewing our product, brainstorming ideas, and inspiring us to do bigger things.
In the past year, we’re pleased to have announced partnerships with:
In 2021, our partners have helped us insure roughly $200 million in property. We choose these partners carefully, to ensure that they support not only our own goals, but our customers’ as well. These partnerships — from property management tools to investment platforms — make it easier than ever for landlords and investors to obtain instant insurance.
Stay tuned for more partnership announcements coming in 2022!
Last, but definitely not least, are the talented group of individuals whose passion and hard work make Obie what it is today.
In the past year, we are proud to say we added 29 employees and created 13 new roles. We’ve added team members to every department: from a Channel Operations Manager to a Chief Risk Officer to a Content Marketing Manager and much more.
At the beginning of the year, we were a small group of 12 people working from our office in Chicago, from an RV traveling the country, and from a handful of several other cities. Now, we’re a global company with 46 employees in 16 states and 2 countries.
As our team grows, so does our capacity for recognizing the talent of our team members. In October we rolled out our Top Dog program – an employee appreciation program that comes with both bragging rights and fun prizes.
And because we work hard, we’ve got to play hard too, which is why we’ve launched the Obie Fun Committee to plan fun team-wide activities. To date, we’ve hosted Digital Drinks, Spooky Sips, trivia, a gingerbread house building competition, and holiday-themed Family Feud.
Our team represents an incredible group of diverse and talented individuals and we can’t wait to continue celebrating them and their work.
As the fastest growing landlord insurance platform in the market, we finished 2021 strong, setting the stage for a successful and busy 2022.
We are only at the beginning of Obie's journey. You can expect to see new and exciting partnerships with companies and platforms who are the bedrock of the landlord space. And, you can expect technology that continues to improve the insurance experience with a growing team that puts clients at the forefront of everything we do (after all, half of us are landlords ourselves). We’re on track for our best year yet and can’t wait to show you what we have planned.
Winter is here. And if you are a landlord with an empty property, you might find yourself worrying. It’s true that demand for rental housing dips slightly in the winter months (October through April). However, supply is also slimmer, which can work in your favor if your property is in a prime location.
If you’re looking for help attracting tenants and securing your rental income for the coming months, look no more. We’ve rounded up the top tips for renting out a property in winter.
A vacant home can be easy to overlook in terms of maintenance and care, especially if you own multiple units or properties. But prospective tenants don’t want to live somewhere that has been clearly neglected.
Stop by once a week (or more, if possible) and complete a few chores to keep your property in tip-top shape. Shovel the snow, dust the inside, and check that all appliances are working. While there, you’ll want to also make sure that pipes haven’t frozen and that no welcome critters have burrowed inside.
You may be used to posting your listing on Zillow and leaving it at that. However, in the winter, you’ll want to ramp up your marketing efforts. Consider putting some money into advertising; Facebook advertising lets you post to specific locations, which can help you find tenants in your area.
Make sure you have high-quality pictures of your property when you do choose to post the ad online. Focus on the inside if the outside is snowy and barren. Or, if you have pictures of the property in the summer, you can add those to show prospective tenants what your property looks like outside of winter.
In addition to photos, why not add a 3D video walkthrough? This can help out-of-town renters who are moving see your property. This can also save you time on individual showings – a big win if you are managing multiple properties.
Does your property have a fireplace? Heated floors? A connected garage? These are all things to bring to the forefront of your rental listing in the cold winter months. When you schedule a showing, be sure to turn up the heat too – prospective tenants want to imagine themselves in a well-insulated, cozy home. Even if you have set the heat down to save on costs, consider bumping it up a bit the day before a showing.
If you are really struggling to attract tenants, why not sweeten the pot a bit? Offer short-term lease agreements. This can help you avoid getting into a long lease with a subpar tenant and opens doors to tenants who only need seasonal housing.
The downside to this is that you may be looking for new tenants in only a few short months. However, this could give you a chance to adjust rent during peak season to account for demand, offsetting the time your property sits empty.
You don’t want to lose your full rental income, but you also don’t want to wait too long to get a tenant into your unit. Consider running a rent special. Whether it’s a month of free parking or a lower rental price, this can widen your pool of applicants.
Be careful on this one. You don’t want to slash rent prices so much that you’re below your minimum rent and don’t turn a profit. You also don’t want to sound like something is wrong with the property. Strike the perfect balance of appealing to tenants while maintaining a healthy profit for yourself.
Do you have current tenants who are looking to move when their lease is up? While this tip may not work in every situation, it’s worth talking to your tenants to see if they’d extend their lease. You may be able to compromise on a new lease if you reach out, saving both parties time and money.
Don’t get the winter blues about your property. These tips should help you draw in a pool of qualified tenants. Not sure if it’s worth renting your house out at all? Check out our article “Should I Sell or Rent My Home? 8 Factors to Consider.”
Anyone renting out a property will need landlord insurance. Make sure you’re covered, no matter what the time of year. Try Obie and get a quote in two minutes or less.
Ah, the holidays. The season for relaxing, spending time with family, and enjoying some time off. You can’t wait to kick up your feet, drink some hot cocoa, and not think about work for a long weekend.
If you’re a landlord, this dream may not be 100% possible. Your tenants and property are always in the back of your mind. And when it comes to your tenants and the holidays, they are likely doing the same thing you are – staying inside, cooking, and having family and friends over.
While most tenants have good intentions, the holiday season brings an increased risk of accident – either to the tenants themselves or to your property. Here we’ll explore common home disasters to watch out for and whether your landlord insurance will cover the damage.
Unless your tenants are traveling out of town (more on that later), they are likely cooking and baking up a storm in the kitchen. Gingerbread cookies? Sign us up!
According to the National Fire Protection Association, Thanksgiving is the peak day for home cooking fires, followed by Christmas Day and Christmas Eve. Whether it’s a grease fire on the stovetop or a turkey left too long in the oven, fire and smoke damage can cause havoc on your walls.
If your tenant calls you at dinnertime from the front lawn and you can hire sirens in the background – don’t worry. Your insurance will cover accidental fire damage. Your insurance may also cover loss of rent. This means if the damage is so extreme your tenant needs to move out for a few months, your insurance will pay you the rental income you’re missing out on.
Wintertime means cold, wet weather. And while we love a white Christmas as much as the next person, we don’t love the dangers snow and ice can cause. Whether it’s your tenant sliding on the driveway and hurting themselves, or a tenant’s visiting grandma toppling over into the snow, winter accidents aren’t uncommon.
Hopefully your tenant is diligent about snow removal, unless otherwise stated in the lease. If he or she falls and is injured, your landlord insurance will protect you from being sued and will cover medical bills. And don’t worry, your tenant’s grandma is also covered under your landlord insurance.
Your tenants may not understand what you can and cannot put in a garbage disposal. Turkey bones? Hard no. Hot grease straight from the pan? No way!
Holiday food belongs in the garbage, but that won’t stop your tenants from clogging drains. And plumbing problems that prevent water or sewage from draining properly are usually an emergency. We don’t want to ruin your holidays, but you’ll want to respond ASAP to any plumbing problem.
This one really depends on your policy and on the damage. If your tenant is using the garbage disposal as a garbage bin (that is, throwing everything and everything inside), then you'll be covered if you have an additional water backup endorsement. If you do not have a water backup endorsement, you may have to pay out-of-pocket (or out of your tenant's security deposit) to cover the damages.
You know your tenant will be out of town for the holiday, leaving your rental property empty. Home break-ins spike around the holidays, as you know if you’ve seen any of the Home Alone movies. While security cameras and alarm systems can come in handy, not every property is 100% secure. So, if your tenant comes back to find a window broken and their TV gone, what do you do?
Damage to your rental property – such as the broken window in this case – will be covered. Your tenant’s stolen property? Not covered under your policy, but your tenant should have renter’s insurance which will replace stolen items in this situation.
Your tenant goes out of town on vacation and uh oh, they forget to turn the heat up to keep the pipes from freezing. You’ll want to advise your tenants to keep the thermostat set to at least 55 degrees. Frozen pipes lead to burst pipes, which leads to flooding, mold, and more.
Luckily for both parties, landlord insurance will absorb the cost of repairing damages to the property if pipes freeze and burst. If there is any kind of water damage in your rental property, you’ll want to file a claim as soon as possible. Wait any longer and mold might grow – which may or may not be covered depending on your policy.
This is a fun one that you may not discover until your tenants move out. Picture this: Your well-meaning tenants are decorating for the holidays and have some ideas for the décor. While your lease may mention normal wear and tear is accepted, your tenants accidentally break down some drywall.
Yikes. It’s normal for tenants to decorate, and you should have a statement in your lease agreement about what can/cannot be done to the walls. Unfortunately, your tenant wrecking the walls is not covered. You’ll have to either dip into the security deposit to cover the damage or in the worst case, sue your tenant for damages.
Related reading: Does Landlord Insurance Cover Tenant Damages?
We all love a good holiday light show. But when lights are not attended to, or the wrong lights are used, your holiday light show might be a little too lit. Whether inside or outside, holiday lights pose a fire hazard.
Yes, thankfully for you and your property, electrical fires are covered. And since any trees or shrubs in your backyard are part of your property, landlord insurance covers damages to those too. However, the amount of reimbursement may vary depending on the cause and extent of the damage.
We want you and your tenants to have a holly, jolly holiday season. If you manage your property on your own, consider reaching out to your tenants with a quick holiday safety guide. You may know if your tenants are going out of town and hopefully you or your property manager can keep an eye out for any potential hazards (e.g. lights left on, unsecured doors, extreme weather).
No matter where you live or who your tenants are, you’ll want to invest in landlord insurance before it’s too late. And because we know you have enough on your holiday plate as is, we offer quotes 24/7 online. So why not choose the fastest and easiest insurance option? Get your quote today.
Considering buying a rental property? Smart decision! Investing in real estate is a great way to build another income stream and diversify your finances.
The only problem? You have no idea where to start. There are so many properties available and so much conflicting advice on how to buy a rental property. It’s easy to get overwhelmed.
The good news is buying a rental property doesn’t have to be complicated. That’s why we’ve put together this post with the top tips to simplify buying a rental property for first-time investors. Let’s get started with the first, and most important, tip — whether you want to be a landlord.
Owning a rental property can provide additional income. However, being a landlord can be time-consuming, expensive, and stressful if you don't know what you're doing.
Finding, screening, and managing tenants can take time. Then once you find tenants, you'll have to respond to any issues or concerns they have (like a broken toilet or noisy neighbor), which could be a significant time commitment if you don't have a property manager.
Owning a rental property additionally comes with some stress and uncertainty. There may be times when your property sits vacant. Other times, a rowdy tenant might cause damage that needs your attention immediately.
If you're already stretched thin in both time and money, being a landlord might not be the right choice at this point in your life. However, if you have determination and grit, owning a rental property can be a great option.
Especially when buying your first rental property, you need a great team to help. Your team should include professionals like a real estate agent, real estate attorney, home inspector, appraiser, property manager, contractor, and more.
Your real estate agent is a helpful resource for finding top-notch professionals. However, it’s important to choose a real estate agent well-versed in investment properties. That’s because buying an investment property is a different process than buying a primary home. A good real estate agent and investment team are key to being a successful investor.
This may seem obvious, but you'll need to be in good financial standing to buy a property. If you have a lot of debt or other monetary commitments, it can be hard to find extra money to buy and manage your property.
If you’re planning to buy your rental property with a loan, it’s also important to save up for a down payment. A 20% down payment means you don’t have to pay mortgage insurance, saving you a nice chunk of money. Having a sizable down payment also means you'll have a lower monthly mortgage payment.
After saving your down payment, you should look for a mortgage. Loans for investment properties are considered riskier by lenders. So, you have to meet higher requirements to qualify – like a good credit score, debt to income ratio, and personal savings. Once you meet the requirements, you can shop around for a mortgage with the most favorable terms (like a lower interest rate).
Financing your property isn’t the only option. You can also pay for your property in cash. This option can cut your expenses and make it easier to deal with vacancies (because you have no mortgage payment). It can take a while to save up to buy a rental property in cash so this may not be feasible for everyone.
Whatever method you choose to buy your rental property, you'll need to do some research before beginning the buying process.
After getting your finances together, it’s time to start thinking about where you want to buy a rental property. Choosing the right location can increase your profit, make it easier to find tenants, and minimize damage to your property. The wrong location can doom your investment from the start.
First, determine what general area you’re interested in. Do you want to buy a local rental property? Or do you want to buy a property in another city? Consider market trends – like whether the area is growing or shrinking in value. You should also consider whether the location has desirable amenities, such as good schools, close shopping, and outdoor activities.
You can also look at rentals in the area to see how much they’re charging for rent. This can give you an idea of how much your rental could make compared with the purchase price. If purchase prices are high and rental rates are low, you should probably avoid the area.
Along with location, you should also determine what property type you’re looking for. Do you want a single family or multifamily property? Do you want a free-standing house, duplex, condo, townhouse, or some other property type?
As a first-time landlord, you might want to choose a smaller property type. Instead of buying a 10 unit multifamily property, you likely want to start with only a few units. A single family house or a duplex/triplex are great starter options.
Once you know where and what you’re looking for, it’s time to find your rental property. You should evaluate each property that is a serious contender for profitability. Otherwise, you could be stuck with a money pit of a rental property.
To determine profitability, you first need to know what you could charge for rent. Then you need to subtract expenses from your expected rent. Your mortgage, taxes, and insurance are one category of expenses to consider. You also need to take into account reoccurring costs – like pest control, landscaping, or a property manager. For unknown expenses (like maintenance or vacancies), you can expect to pay roughly 15% of your rental income.
After subtracting these expenses, you should turn a profit. If the expenses are more than expected rental revenue, you shouldn’t buy the property. If you have positive cash flow after this calculation, the property could be a good choice.
After you buy a property, you need to make sure it’s protected.
You put in all this work to find a great investment, so why leave it vulnerable to unexpected disasters? All it takes is one event, like a fire, hailstorm, or frozen pipes, to damage your property and make it unlivable. Without landlord insurance, you’ll have to pay for these expenses out of pocket – which can be thousands of dollars.
Instead of risking being on the hook for costly repairs, you should get landlord insurance. The right landlord insurance can protect your property from common perils (like natural disasters). It can also protect you from liability for tenant injuries.
Landlord insurance is essential for any first-time investor. However, it’s important to choose the right policy. At Obie, we can help you find the insurance you need. Our modern approach is fast, transparent, and completely online. You can get a quote in minutes. Plus, you can save 25% on landlord insurance.
Get your quote today to start protecting your rental property.
At Obie, we believe real estate investing shouldn’t be complicated. And to that end, we are partnering with Fractional — a social platform for real estate investing with others. Through this partnership, investors can buy rental property and get coverage all in one place. The policy cost is immediately integrated into their cash flow models on the Fractional platform, creating a straightforward and simple approach to investing.
Fractional makes real estate investing accessible. Members can co-own properties, collaborate on creative projects, and share ideas within the community. Fractional opens the door to the real estate market and creates a space where investors can build their confidence, portfolio, and network.
Fractional owners typically make 40% more compared to REIT and syndicate investors by taking advantage of direct ownership tax benefits and avoiding asset management fees.
Fractional’s investors include Y Combinator, Will Smith, Kevin Durant, Goodwater Capital, Unusual Ventures, Global Founders Capital, On Deck, Contrary Capital, Soma Capital, and more.
Obie’s integration with Fractional means less barriers to real estate investing, a win-win for both newcomers and seasoned investors. By integrating with Obie, Fractional users can seamlessly obtain quotes and coverage for their properties.
For Obie, this opens doors to those interested in investing but who may not have had the funds to singularly purchase rental property. Now, real estate investment is a little simpler and a lot more accessible.
Obie is reinventing the insurance process for landlords and rental property investors. Whether you’re a seasoned investor or just starting out, Obie makes requesting a quote and getting coverage simple, affordable, and transparent. Obie simplifies the insurance experience by providing instant quotes. No back-and-forth with brokers or surprise costs at signing — the way insurance buying should be.
Whether you’re a first-time landlord, an accidental landlord, or an experienced landlord with a new property, it can be hard to figure out how much to charge for rent. Charge too little and you could be leaving money on the table. Charge too much and you may have trouble finding tenants. So how do you calculate the right rent to charge?
We’ve got you covered. We’ll explain how to find the perfect rent to charge and even how to charge more for your property. Let’s get started.
Get ready to rent out your property in no time. Here are four steps to calculate rental income:
The best way to calculate rent for your property is to research similar properties. You can check out other rental listings by browsing sites like Zillow or Apartments.com. These sites give you an idea of what other rentals are charging in your area, which is a good starting point.
You can also talk to property managers or other rental professionals (like a leasing agent). These rental professionals will have an idea of current market conditions. And they’ll know what similar properties are successfully charging for rent.
Another option is touring similar properties for rent. During this tour, you can ask the landlord, property manager, or whoever is conducting the tour how they decided on the rental price. This can give you insight into what factors you should consider when setting your rent.
After looking at similar listings, you should get a ballpark range for the average rental listing. You can use those listings to get a general idea of what market rate is. You'll then want to factor in your property's specific characteristics, including:
• Square footage
• Number of beds and baths
• Closet and storage space
• Updated design (appliances, counters, flooring, fixtures)
• Layout (open concept vs. divided floor plan)
• Single vs. multistory
• Location (schools, crime rates, proximity to shopping)
• Parking (attached garage, driveway parking, or street parking)
• Security (gated community, safe neighborhood, alarm system)
• HOA amenities (fitness center, swimming pool, outdoor gathering space)
Depending on your property, you should adjust the average rate up or down.
For example, you might find that the average property is renting for $1,500 a month. If the average property has four beds and two baths, but your property only has three beds and one bath, you should adjust your rent down. However, if the average property has outdated fixtures and is 1,700 square feet, but your property is updated and 2,000 square feet, you can adjust to a higher rent.
The average rental property probably isn’t an exact match for your property. Our recommendation is to do your research and .
After you’ve adjusted the average rent to better fit your property, you need to compare that number to your minimum and maximum rent.
Your minimum rent is the lowest rent you can charge to cover all expenses. Along with your mortgage, insurance, and taxes, you also need to cover any maintenance problems that crop up (like a broken HVAC). Depending on how involved you want to be, you should also consider the expense of hiring a property manager.
Charging less rent than the minimum means you’ll lose money on your property. If you charge the minimum rent, you’ll break even but not turn a profit on your investment.
The maximum rent is the maximum amount you can charge to cover all your expenses, make a profit, and attract the best tenants. Charging this rent will help you generate a strong cash flow and grow your property value.
After adjusting your rent in step two, you should arrive at a number that’s close to the maximum rent. You can tell if the rent you calculated is above your maximum rent if you have trouble attracting tenants.
Some landlords choose to charge slightly under their maximum rent. This can help you attract and keep tenants fairly easily. Tenants feel like they’re getting a bargain when they see that your property is priced slightly lower than others. However, you should only charge less than your maximum rent if you can still turn a good profit at that price.
Unfortunately, the rent you set now likely won’t work in the future. Inflation pushes your expenses higher, meaning you have to charge more periodically.
Real estate market conditions can also change with the economy. In hard times, you might see rents going up because people can no longer afford to buy a home. This increased demand means you should also raise prices.
Seasonality can also impact rental pricing. In most places, people want to move when it’s warm. So, there’s more demand in the summer pushing rents up. However, in the winter, there’s lower demand – so rents fall.
Keeping an eye on the market can help you adjust the rent you charge to maximize profit. However, before increasing rent, make sure to check your local rent laws. That way, you won’t face legal consequences for raising rent.
If you calculate rent for your property and it’s lower than you want, you have a few options to increase rent:
Making your rental pet-friendly can help you attract more renters. Be careful though. Unruly pets can cause havoc on your property. Consider a monthly pet charge to cover any repairs you’ll need to make when the tenant moves out.
If your rental property is out of date, you can make simple changes to make it more attractive. You can swap outdated carpet for stylish wood or wood-look floors. Updating paint to neutral and on-trend colors is another easy way to improve your property. You can also update appliances. Switching out old appliances for new, energy-efficient appliances can be attractive to renters and reduce utility costs.
If you include utilities (gas, electricity, water, trash, internet)in your rent, you can charge a higher rent. However, you should make sure the higher rent more than covers utilities to increase your profit.
Figuring out how much to charge for rent can be tricky. However, it’s important to charge the right amount to maximize profit and attract the best renters. By looking at similar properties, considering your property characteristics, figuring out minimum and maximum rent, and keeping an eye on market conditions, you can charge the best rent for your property.
Along with charging the right rent, it’s also important to protect your property. The right landlord insurance can protect your investment from unexpected events (like fire or natural disasters).
If you’re looking for the quickest and easiest way to get landlord insurance, Obie is the way to go. Obie’s modern, transparent, and completely online process can get you a quote in minutes.
At Obie, we want to help everyone achieve the dream of owning and renting property — whether that’s a young family renting out their first home, or a seasoned investor with a portfolio of properties.
That dream shouldn’t be complicated and stressful. And as a company streamlining the way landlord insurance is bought, we value partners who provide similar transparency. This is why we have partnered with Belong to help provide new landlords with rental property insurance.
This partnership will connect those looking to move and rent their homes with a simplified way to get a landlord insurance quote. Instead of spending hours (or days!) shopping around for property management companies and insurance, this partnership provides the convenience and ease of getting both in one place.
Belong is a full service end-to-end home management company backed by A-list investors such as Andreessen Horowitz (a16z), GGV Capital, and Battery Ventures to name a few. Their mission is to create authentic belonging experiences for those who own much-loved homes, and those longing for that feeling.
For the homeowner, Belong will handle everything for you. For starters, they are going to treat your home exceptionally well. Their in-house, full-time team of Pros will take care of all maintenance and reconditioning on your home, showing up on time, and doing work correctly the first time around.
They'll find really great Residents that will love your home almost as much as you do. And because Belong is building for the future, everything is handled right through their platform, from rent and maintenance requests to communications with your dedicated Concierge.
Property management is all the maintenance and administrative work involved with renting out a property. From collecting rent to handling repairs, property management companies help landlords with a variety of services. Property management companies are ideal for landlords who live far away from their properties or those who would prefer to relax and collect passive income without being too involved.
Many property management companies offer basic services such as:
• Tenant screening
• Rent collection
• Mortgage and utility payments
• Repair and maintenance service
• Navigating landlord-tenant relationships
In addition to the property management services listed above, Belong offers even more services to take the hassle out of renting. These services include moving, cleaning, storage, and even furnishing your home to make it Instagrammable. Belong partnerships offer tons of discounts. Because Belong is truly a full service end-to-end home management company, it only makes sense that new landlords be able to find insurance for their properties while using Belong’s services.
Here is where Obie comes in. We want to eliminate as many hurdles as possible to getting affordable, straightforward rental property insurance. And by partnering with Belong, homeowners new to the landlord world can eliminate one more touchpoint in the rental process.
“We were able to save my homeowner almost $4,000 by having him go through our partnership with Obie for his landlord's insurance. The first of many (hopefully) residents and homeowners we will be able to help get insured and save them money moving forward!" - Will Leavitt, Member Success Manager
Obie also works with Belong Home customers to help them understand the differences between Homeowners Insurance (HO3) and Landlord Insurance (DP3) because the coverage and risks each policy protects against are different. Landlord insurance is designed to protect non-owner occupied properties - so DP3 policies usually cover the residence and other structures on the property. If you’re interested in learning more about the differences check out the video between Belong and Obie’s co-founder Aaron Letzeiser here.
Obie is reinventing the insurance process for landlords and rental property investors. Whether you’re a seasoned investor or just starting out, Obie makes requesting a quote and getting coverage simple, affordable, and transparent. Obie simplifies the insurance experience by providing instant quotes. No back-and-forth with brokers or surprise costs at signing — the way insurance buying should be.
At Obie, we want to reduce barriers to becoming a landlord, which is why we’ve created a streamlined insurance product that provides a coverage quote within minutes. And to further our mission, we are partnering with Doorvest — a full service real estate investing platform that helps everyday people buy and own rental homes completely online.
Doorvest is an entirely-online platform for owning income-producing private real estate. They empower individuals to unlock homeownership, passive income, and equity by simplifying the process of buying and managing an affordable, high-yield rental home. It is the only platform that provides complete transparency via a comprehensive breakdown of monthly cash flow, property activity, legal documents, and reports through an investor dashboard.
Doorvest enables customers to own a rental home and generate passive income without ever having to visit the home. Doorvest works with the individual to identify and understand their investing criteria, goes out and sources the home, renovates it, resells it outright to the customer making them 100% homeowners,, then takes over long term operations.
Doorvest offers customers a Home Renovation Guarantee for all renovation-related repairs and maintenance on investment properties for one year in tandem with guaranteed resident placement for one year, meaning customers can anticipate all costs affiliated with their investment upfront.
Obie sees Doorvest as a future leader in the real estate industry. Doorvest expands access to real estate investing by using their technology to buy and manage high-yield investment homes for the independent investment community. Obie empowers Doorvest to focus on their core offerings, while eliminating the headache of procuring insurance on every property as they continue to scale.
“We feel confident using Obie for our coverage needs, as well as referring our clients to Obie because they are extremely responsive, offer many coverage options, and have significantly simplified our process when it comes to obtaining insurance.”
Obie is reinventing the insurance process for landlords and rental property investors. Whether you’re a seasoned investor or just starting out, Obie makes requesting a quote and getting coverage simple, affordable, and transparent. Obie simplifies the insurance experience by providing instant quotes. No back-and-forth with brokers or surprise costs at signing — the way insurance buying should be.
As a landlord, you want to keep your tenants happy. Happy tenants stay longer and (hopefully) treat your property with respect. Unhappy tenants cause a high tenant turnover, meaning more time and money on your end to find new tenants, and are more likely to cause damage to your property
To keep tenants happy, you’ll need to address tenant complaints quickly and effectively. Unresolved issues can lead to some seriously angry tenants at best and a lawsuit against you at worst. As a good landlord, staying on top of tenant complaints and dealing with them in a quick, professional manner can go a long way to keeping tenants.
Wondering how to do this? That’s what we’ll cover in this post. We’ll go over the top common tenant complaints and ways to resolve them. Let’s get started with the first common complaint, maintenance issues.
One of the most common tenant complaints is unresolved maintenance issues. Whether it’s a blown-over fence, flooded basement, an appliance that doesn’t work, or anything else, tenants expect you to fix the issue promptly. After all, they are paying for everything to be in working order.
It’s important to respond to tenant maintenance requests as soon as possible. If it’s not something you can fix immediately, keep tenants updated on what you’re doing to fix it and how soon they can expect a fix.
You should also have a good maintenance recording and tracking system. That way your tenants have a convenient way to report a problem and you can respond as quickly as possible.
Another common tenant complaint is rent increases. You need to increase rent periodically to keep up with inflation and the rental market. Not surprisingly, tenants hate paying more to rent your property. A rent increase, especially a high one, can lead to dissatisfied tenants.
You should inform tenants of any rent increases way in advance. That way they aren’t surprised when it’s time for them to renew their lease. Be sure to explain any increases; a small bump in rent due to inflation is reasonable and means tenants aren’t actually paying more, which can resolve tenant frustration over rent increases.
Tenants might also be unhappy with your security deposit requirements. Maybe you require a full month’s rent as deposit or maybe you have strict cleaning requirements. Either way, no one wants to part with money they may or may not get back. If you do have to keep part of or all the deposit to address any tenant-caused issues, tenants may feel like you are overcharging them.
To resolve this complaint, you should have clear wording in your lease about what damages will result in keeping the security deposit. You should also verbally explain this. That way, if you have to keep the deposit, there are no surprises as to why.
An unresponsive or hard-to-reach landlord is also a common tenant complaint. It can be frustrating for tenants to wait days or weeks to hear back from you – especially if they need help with an urgent issue.
Give tenants an easy way to contact you, whether that’s your personal cell number or an email address you check daily. Make it your goal to respond within 24 hours and sooner if it’s an emergency. This ensures you’ll see any tenant communication and be able to respond quickly.
Tenants also often complain about a lack of privacy. You own your property and may want to check-in on it from time to time. But when tenants are renting it, you can’t come in whenever you’d like unannounced. If you are popping by with random inspections all the time, tenants feel their privacy is invaded. There’s another reason to avoid doing this — frequent inspections are illegal in many states.
First, you should look at your local rent laws to see how often you can enter your property and how much notice you have to provide tenants. Then, you should reduce how often you inspect your property. Reducing inspections provides tenants privacy and makes sure you’re legally compliant. Your rental agreement should have an acceptable notice period for when you can enter the house or unit — a common example is giving tenants 24-hour notice before you schedule any inspection or routine work.
Safety concerns are another common tenant complaint. Whether it’s a door that doesn’t lock, a run-down fence, a dangerous walkway, a high neighborhood crime rate, or any other issue, tenants may not feel safe on your property.
If any locks or other safety measures are broken, you should promptly fix them. For a high crime neighborhood, you can invest in an alarm system, high-quality locks, security cameras, and other measures to make tenants feel safer on your property.
Along with safety concerns, tenants commonly complain about noisy neighbors. Your property’s neighbors might frequently throw loud parties, have loud music playing all night, or just generally be noisy all the time. Dealing with excessive noise can tank tenant happiness.
If the loud neighbors are also your tenants, you can resolve the issue by talking with the tenant. You might have to evict the tenant or not renew their lease if they won’t change their behavior.
You have fewer options to deal with noisy neighbors who aren’t your tenants. You could try the old-fashioned way of walking over and talking with your neighbors. If they are renters, you may have to resort to contacting their rental company or the extreme last resort of filing a noise complaint to the police.
The last common tenant complaint is pests. Ants, roaches, rats, mice, and any other insect or rodent infestation can not only cause your tenants to be unhappy, but these unwanted pests could damage your property. Not addressing the infestation can pose serious health risks to your tenants and violate rent laws.
While some creepy crawlies are a natural part of life, any infestation of rats, mice, termites, and other potentially hazardous creatures should be dealt with ASAP. To prevent future infestations, you should have a pest control service regularly treat your property.
To be a successful landlord, you need to keep tenants happy by addressing any complaints. Happy tenants are more likely to renew their lease, or at the very least, leave you a positive review online. The key is communication. Address complaints as soon as they crop up. If that’s not possible, communicate with your tenants on what you plan to do regarding the situation.
However, before you even have tenants to keep happy, you’ll need to protect your property. The right landlord insurance can help you make sure that unexpected events (like fires, natural disasters, and frozen pipes) don’t put your property out of commission.
As a landlord, you don’t have time to go back and forth with traditional insurance. Or, wait weeks for a quote. That’s why Obie has a modern, transparent, and completely online approach to landlord insurance. You can get a quote in minutes and save an average of 25%.
As part of the goal to simplify the rental process, Obie has partnered with NestEgg. NestEgg is available for current landlords who are looking to achieve financial independence and passive income with one simple property management app. This partnership lets landlords manage their properties while saving time and money all in one place.
NestEgg is a property management company that takes the stress out of being a landlord. Using smart technology backed by real human support, the NestEgg team provides automated rent collection, financing, maintenance support, and much more.
NestEgg offers on-the-ground support including contractors, local leasing agents, yard care companies, onsite cleaners, and more. Each NestEgg landlord has a dedicated rental manager who handles the day-to-day responsibilities of being a landlord. And with three distinct pricing options, NestEgg landlords can be as hands-off or involved as they want.
Obie’s integration in NestEgg’s platform creates a seamless insurance experience for NestEgg users. Traditionally, insurance has been a manual and time consuming process, but with Obie’s embedded solution, users can easily request and bind quotes without ever leaving the NestEgg platform. This partnership creates a new level of convenience for landlords while providing them the protection they need.
"Our mission at NestEgg is to help smaller independent real estate investors reach financial independence faster. We partnered with Obie because they've built the first insurance solution uniquely focused on their needs and success." - NestEgg Team
Obie is reinventing the insurance process for landlords and rental property investors. Whether you’re a seasoned investor or just starting out, Obie makes requesting a quote and getting coverage simple, affordable, and transparent. Obie simplifies the insurance experience by providing instant quotes. No back-and-forth with brokers or surprise costs at signing — the way insurance buying should be.
It's every landlord's worst nightmare. Your tenants move out and instead of finding your property in good condition, you discover your tenants trashed your property.
Whether intentionally or through wear and tear, your tenants caused thousands of dollars of damages. You now have to deal with fixing up your property on top of finding new tenants.
Your first thought may be: Can landlord insurance help me pay for the repairs?
We hate to be the bearer of bad news, but unfortunately, many landlord insurance policies don’t cover tenant damages. The good news is there are other ways to pay for tenant damages. We’ll cover that and what tenant damages are (and aren’t) covered by landlord insurance in this post.
Let’s start with a look at the different types of tenant damages.
Tenant damages fall into three main categories — accidental, intentional, and wear and tear. Landlord insurance usually only covers accidental damages. Here’s a closer look at each type of tenant damage.
If a tenant accidentally damages your property, such as starting a grease fire or causing pipes to freeze, landlord insurance will likely cover it.
What accidental tenant damage is covered depends on your landlord insurance policy.
Unlike accidental damage, intentional tenant damage is caused on purpose. From spray paint graffiti, to smashed walls, broken doors, and more, an angry tenant can cause a lot of damage to your property.
Many landlord policies don’t cover intentional tenant damages. If your tenant intentionally damages your property, you can potentially cover the damages with the security deposit. In extreme cases, you can also sue your tenant for the damage.
Wear and tear damage is the most common type of tenant damage. Even the best tenants can cause damage to your floors, walls, appliances, counters, and more from everyday life. With the right tenants, you can minimize this damage. But, you probably can’t avoid it altogether.
Like maintenance issues, landlord insurance doesn’t cover wear and tear tenant damages. Instead, you can often use the security deposit to fix any of these damages.
If your property has intentional or wear and tear damage, you can’t pay for the damages with an insurance claim. This doesn't mean you have to pay for the damages out of pocket either.
Instead, you can first use the security deposit to repair tenant damages. If tenants only left wear and tear damage, hopefully the security deposit will cover everything. Before using the security deposit to pay for damages, be sure to check your local rent laws. Many states have strict laws and procedures landlords need to follow when keeping the security deposit.
The security deposit may not completely cover intentional damages. There are two options if that’s the case. You can either pay for the rest of the damages yourself. Or, you can sue your tenant for the damages. This legal process can be time-consuming and expensive, so it should be a last resort.
Most tenants who intentionally damage your property will take off after causing the damage. However, some will stay on your property to continue causing damage. If this is the case, you need to get the tenants out of your property.
You can’t just kick out tenants though, as this violates your lease and rental laws. Instead, you need to evict your tenants. This involves filing the right paperwork and going before a judge. If you need to evict your tenant, it’s a smart idea to work with a lawyer. That way, you can resolve the issue as quickly as possible –— without getting into legal trouble.
Depending on your policy, landlord insurance will usually cover accidental tenant damage. But, if tenants cause so much intentional or wear and tear damage to your property that you can’t rent it out, landlord insurance could help.
If you have loss of rental income coverage, your landlord insurance could reimburse you for rent while you’re repairing your property. You’ll still have to pay for damages yourself or with a security deposit. But, you won’t have to worry about the lost rent during repairs.
Landlord insurance covers accidental damage and many natural disasters that can damage your property. So if your landlord insurance covers damage to the structure, does it cover tenant belongings that were also damaged?
Nope, it doesn’t. That’s why your tenants need renter’s insurance. Landlord insurance only covers the structure and your liability. Depending on your policy, you can also add coverage for other structures on your property and loss of rental income coverage. Because landlord insurance is designed to protect you, it doesn’t cover any tenant belongings.
The best solution to tenant damages is preventing them in the first place.
To prevent intentional tenant damages, you need to meticulously screen potential tenants. This can help you weed out any tenants who have caused damage elsewhere. By thoroughly screening tenants, you can choose tenants who have a great rental history. This rigorous screening significantly decreases the risk of intentional tenant damages.
For wear and tear damages, you should inform tenants of repair costs. You can usually put the security deposit towards wear and tear damages. If it doesn’t completely cover the damage, you can bill tenants for the remaining cost. Tenants will be more motivated to take care of your property if they know how much they’ll have to pay for any damages.
While landlord insurance doesn’t cover all tenant damages, it can protect you and your property from events like:
• Fires
• Freezing pipes
• Hail
• Windstorms
• And more
Plus, landlord insurance covers accidental damages and can help make up for lost rent from tenant damages. It's important to choose the right landlord insurance to get the correct coverage. Check out our guide to DP1 and DP3 policies to learn more about different types of landlord insurance.
Once you figure out what type of landlord insurance you might need, it’s time to get a quote. With Obie’s fast, transparent, and completely online process, you can get a quote in minutes.
You love your home. You’ve probably put a lot of time, work, and money into it. But now it’s time to move on. Maybe you outgrew your home, need to relocate, or found a better property — whatever the case, you’re wondering what to do with this property.
The most obvious answer is to sell your home, right? You can’t live in two places at once and you might still have a mortgage on the first property. Selling your home means an instant lump sum of cash. No stressing out about two properties and no complicated taxes at the end of the year.
But you have another option: renting out your house. With renting, you could establish a stream of steady passive income, and your home will likely appreciate should you want to sell in the future.
So, how do you know if renting or selling is the right choice? We’ve broken it down for you in this article. Let’s start with a look at reasons to rent out your home.
Selling is the more common of the routes, but renting can help you build an additional income stream and hold on to your home if you ever want to go back. Even if you're a new landlord, transitioning a property from your own home to being a rental is doable—even for first-timers. Here are four factors to consider for renting out your home.
One of the best reasons to rent is for the extra income. When you rent your home, it should bring in enough to cover your mortgage, any upkeep costs (like maintenance, HOA, or management), and still turn a profit. If you can earn more from rental income than your total expenses cost you, you should consider renting out your house.
When considering profitability, you need to make sure your home is a good rental property. This means that it’s attractive to renters with in-demand finishes and amenities. You'll want to make sure your home is in a desirable location and that everything is in working order before renting — the more up-to-date your house is, the more rent you may be able to charge.
You might also want to hang onto your home if it won’t sell for a lot. Depending on how much equity you have in your home and any selling fees, you might make little to nothing from selling your home.
Even if you make a decent profit from selling, you could stand to make more long-term from renting it out. In this case, it’s a smarter financial move to rent your home instead of selling it.
A buyer’s market probably isn’t the right time to sell. When the market favors buyers, you’ll get less for your home. Waiting out the market until it swings in favor of sellers could be a better idea.
And, if your home is in an up-and-coming area, you’ll make more from holding onto your home. You can likely charge more for rent every year. Plus, after waiting a few years, your home could be worth much more than it is today — making renting your home a better option.
Another reason to rent out your home is if it has sentimental value. While you have to leave your home for now, you might hope to return some day. If you sell your home, there’s not much hope for ever getting it back.
For this reason, renting is best. Your rental income will pay for your mortgage and any upkeep. And when the time is right, you can come move back or pass the home to someone else in your family.
Renting out your home is a great option for most people. However, there are some cases where selling is better. Here are four signs you should sell your home.
Selling could be the right option in a strong seller’s market. A seller’s market helps you get the most for your home, with fewer contingencies and concessions. This type of market is the best time to sell your home.
A lot of equity in your home could make it even more profitable to sell during a seller’s market. The more equity you have, the more you earn from selling your home. With a lot of equity, selling in a favorable market could make you more short term than renting.
Renting out your home can be a great way to generate more income. However, renting out a house also comes with all sorts of expenses. You’ll have to worry about extra taxes, maintenance, HOA fees, administration, property management fees, and more. If you don't have the time or money to deal with the administrative costs of renting, selling is a better option.
Finding great tenants is key to successfully renting out your home. However, finding tenants involves marketing, tenant screening, applications, and more. After you find the right tenant, you then have to keep tenants from damaging your home, respond to any tenant maintenance requests or problems, and make sure you’re compliant with all landlord laws.
While you can hire a property management company to make managing tenants easier, it can be a lot of work for an unseasoned landlord. Don't have time to look into tenants? Consider selling.
You likely weren't thinking of rental potential when you bought your house. And that's okay. Some properties may not be great rentals. You may not have kept up with home maintenance, or maybe the property isn't in an ideal location. Either way, it may be more hassle than worthwhile to try renting out your home, and you may stand to lose money if your home sits unoccupied.
Like the idea of renting but your current property just isn’t right? Consider taking the profits from selling your “bad” rental and invest in something new.
After considering these eight factors, you might still wonder whether to rent or sell.
For many people, renting is a better option than selling. Renting can help you build an additional income stream and can be more profitable in the long run. Between rent and appreciation over time, you can often make more from renting than selling. You also get to hold onto your home if you’re sentimentally attached.
However, renting out a home isn’t for everyone. Your home may not be in shape to be a rental or maybe you owe too much on your mortgage that you couldn’t turn a profit. In that case, it’s better to sell and then invest in a different rental property.
If renting sounds like the right fit, you can check out our guide to becoming a landlord and top tips for first-time landlords to get started.
But before you start renting out your home, you'll need landlord insurance. Specifically designed for a property you don’t occupy, landlord insurance can help you protect your investment. And, this insurance could protect you from liability for tenant injuries.
The easiest way to get landlord insurance is with Obie. With our transparent, modern, and online approach, you can get a quote in minutes.
Get your free landlord insurance quote today to start renting out your home.
When you purchase a house, the paperwork is staggering. And when it comes time to pay, there seems to be an endless number of people on the receiving end of your checks. A financial institution, the government, realtors, the list goes on.
To make life easier, mortgagee billing exists. In this article, we define mortgagee billing and escrow accounts, explain how it all works for insurance, and show you how to switch insurance policies mid-term.
Mortgagee billing refers to the situation in which a mortgage lender (usually a bank or credit union) pays for the homeowner’s, or borrower’s, insurance premium through an escrow account. You may also see this referred to as escrow billing.
In order to set up mortgagee billing with your insurance company you will need a few pieces of information.
•The mortgagee clause
•The loan number
•Optional: An email or fax number so your insurance agent can send policy documents.
If you already have your policy set up on mortgagee billing, the mortgagee clause and loan number will be listed on your policy declarations page. If it is a new purchase, your lender will be able to provide that information. Be aware that the mortgagee address is usually a different address than where you send your checks.
An escrow account is similar to a savings account, but it is managed by your lender (your mortgage provider). When you close on your new property, your lender will estimate how much you will owe for yearly property taxes and insurance. That total is divided up and added into your monthly mortgage payments.
Note: This is an estimated total and you may owe more money at the end of the year. We always recommend having savings on-hand if you do receive a bill at the end of the year.
In some cases, you may not have a choice as to whether you use mortgagee billing or not. If you are using a mortgage lender and have less than a 20% down payment, your lender will likely require you to use an escrow account.
Mortgagee billing makes life easier for all parties involved. Some benefits for you are:
•An escrow account may help you budget your money. By paying monthly, you don’t need to make large annual payments for taxes and insurance.
•The lender generally takes care of paying your hazard insurance and property taxes. Without an escrow account, you’d be on the hook for paying for these individually.
Now you know what mortgagee billing is. And chances are, if you have a mortgage, you’ve been using mortgagee billing anyway. While you have little control over your property taxes, your landlord insurance is completely up to you (as long as you are sufficiently covered). You likely have some specific questions regarding insurance and your escrow account, so let’s dive in.
Congrats on the new property! For a new purchase, you’ll need to choose a new insurance carrier and send a declarations page to your lender.
During the closing process of your property, your carrier will inform the client and lender at the closing of the total premium. At the closing, it’s the title company who cuts the check and sends it to your carrier, usually by mail.
Say you find a better policy, either because it’s more affordable or provides better coverage. You’re halfway through your current insurance policy, but don’t know how the cancellation and refund process works.
The first step you’ll want to take is to reach out to your current insurance company. Let them know you’d like to cancel and ask if they have any specific steps you need to take to get a refund for your unused policy.
We highly recommend signing a new policy before canceling your old one or at least making sure you are canceling your old policy on the same date your new policy starts. Any lapse of coverage could result in you paying more to your lender, who may put forced placed insurance on your property during any lapse.
Once you cancel your old policy, your insurance company will typically send the refund of an unused premium directly to you. Since your lender pays for the premium up-front out of escrow, you’ll want to check with them regarding any outstanding balance on your escrow account. Since the lender pays for your new policy, they’ll want a refund to be reimbursed in your escrow account, otherwise you can expect a higher escrow payment next year.
If you are switching policies midterm, you will need to tell your lender. If you forget, your lender will assume you are not covered at all and will put forced-place insurance on your property.
While your new insurance company will send documentation to your new lender via mail or email. It is always important for you, the client, to inform the lender that you are switching insurance policies as they may have a specific website, email, or fax number you or your insurance company would need to send documents to to make sure the policy gets paid.
Forced-place insurance is insurance your lender will automatically enroll you in if your current coverage lapses or if they deem the coverage to be inadequate. Forced-place insurance is usually much more expensive than a traditional policy so we recommend avoiding it at all costs
If you are put on forced-place insurance even though you have other coverage, you can call your lender and let them know as soon as possible. They should backdate to when your new coverage started.
This is a common situation. Lenders make money by selling your mortgage loan to other companies. If this happens, don’t panic. Your mortgage and insurance premiums will stay the same. Once your loan gets sold, your new lender should reach out to your insurance company.
Sometimes this doesn’t happen, or the new lender sends something to the client (you) to do, like forwarding over documentation or contacting your insurance provider. It’s important that you pay attention to anything your new lender sends you or asks of you.
Your insurance premiums may change on an annual basis. If this happens, you may owe more money at the end of the year. Your lender will increase your escrow payment as needed to cover the additional cost – this applies to any increase in taxes too. And, in the case that you are overpaying, you’ll get a refund for any extra money in your escrow account.
If you are staying with your carrier, this one is easy. Your carrier is required by law to send a renewal notice to both you and your lender. Your carrier will bill your mortgage lender and the lender uses your escrow money to renew the policy. Then, the cycle of escrow continues where you make monthly payments that are used to pay off this premium over the course of a year.
Still have questions as you look to close on your property or switch carriers? We’ve got your back. Obie offers a streamlined process to getting a new quote on your rental property. Our team is on-hand to answer your questions and help you save time on insurance shopping. Let us do the hard work for you. Start your Obie quote today or reach out to our team with questions.
It’s been raining for days. With the dreary weather, you want to stay inside where it’s dry. Only, your property isn’t completely dry. You or your tenants notice water on the walls, floors, or even the basement. Somehow, water is getting in — and causing potentially lasting damage to your property.
Sounds like a nightmare, right? Your roof isn’t leaky, and your siding is in good shape. How would water get in?
The culprit is likely right outside your door: Clogged gutters. Not cleaning your gutters regularly can lead to a host of problems, including water damage to your property.
Luckily, there are easy ways to spot clogged gutters and if noticed early on, are easily remedied. Don't let clogged gutters ruin your property. In this post, we’ll give you tips to fix even the most stubborn clogged gutters. To start, let’s take a look at what damage clogged gutters can cause.
Gutters — almost every property has them. Yet gutter maintenance is probably not something you think about regularly. Compared with managing current tenants, finding new tenants, fixing any appliances or equipment that breaks, gutter maintenance can seem unimportant. You can always get to it later, right?
Wrong! Gutter cleaning isn’t something you should be skipping. In fact, it should be on your checklist of home maintenance chores to do twice a year. Clogged gutters can cause mold, foundation damage, basement flooding, roof leakage, wall and ceiling damage, and more. All of which can be expensive (not to mention time-consuming!) to fix.
The good news is that regular gutter cleaning can prevent these problems. Whether you DIY or hire a professional, keeping up with gutter maintenance can save you a big headache down the road.
You know that clogged gutters can lead to pretty serious problems for your property. But how do you know if you have clogged gutters? We’ve got you covered with the top nine signs your gutters are clogged.
This seems obvious, but if your gutters are old and in rough shape, there's a good chance you may have a clog. Debris can weigh down your gutters and eventually, your gutters will sag or collapse under this weight. Before collapsing, your gutters might also start pulling away from your roof. If it looks bad, it probably is bad.
Your gutters should direct rainwater to the downspout and away from your property. If you see water spilling over the sides of your gutters, there's likely debris built up inside, blocking the water from properly flowing.
Another exterior sign of clogged gutters is standing water and eroded dirt. If your gutters are working properly, you shouldn’t see any water around the foundation of your property. When it’s not raining, washed away dirt around your house can also be a sign your gutters are clogged.
Your siding can be stained for a variety of reasons. One common reason? You got it — clogged gutters. If your gutters are clogged, they can’t direct water away from the sides of your property. This leads to water stains on your siding.
Along with stained siding, mildew or rust on the exterior of your home are signs of problematic gutters. Trapped or overflowing water inside your gutters contributes to the growth of mildew and mold. If you have vinyl or metal siding, you may also see rust spots. While rust is comparatively harmless if caught early, mildew and mold can lead to health problems for you and your tenant if left to spread.
Do you have a tree close to the side of your house? You could have more than a few pesky falling leaves to worry about. Tree and plant debris that get stuck in your gutters can actually lead to plant growth. Seeds get trapped in your gutters, and with the right amount of water and sunlight, they can start to sprout in your gutters. Keep the plants in your garden and clean your gutters.
That plant growth and debris can be quite inviting for little critters to nest in. If you notice excessive debris in your gutters, keep your eyes peeled for small nests. You could have birds or other wildlife living rent-free in your gutters.
You can also spot clogged gutters from inside your property. If you see water or dampness on your walls, ceilings, or floors, it’s a sign that your gutters are clogged.
Related reading: 11 Signs of Water Damage on Your Property
One last way to spot clogged gutters is by looking at your basement. Water in your basement can be caused by many problems, but it's usually never a good sign. Clogged gutters could once again be at work here, allowing rainwater to hang out near your foundation and seep into your basement.
You now know how to spot clogged gutters. But what happens if you find a clog? You can either unclog them yourself or hire a professional.
If you go the DIY route, it’s important to be safe. Cleaning your gutters usually involves getting on a ladder. Without the proper safety precautions, it’s easy to fall and be seriously injured. Before cleaning your gutters, you need to make sure you have a sturdy ladder and someone on-hand to hold the ladder or assist you.
Before you climb the ladder, you need to gather supplies. Sturdy gloves are a must to protect your hands from any sharp debris. You also need a bucket to collect whatever is clogging your gutters. And, you might need an extension tool to clean hard-to-reach spots.
Once you have your supplies, it’s time to clean your gutters. With your gloved hands (or a scoop!), you need to reach into your gutters and pull out any debris. You then put the debris in your bucket and repeat the process for all gutters around your property.
Sound time-consuming, tedious, and even a little gross? It can be, which is why DIY gutter cleaning isn’t for everyone. Hiring a professional can be more expensive. But, a professional can save you hours — which could be worth the cost. Plus, if you have a clog in harder-to-reach areas (like your downspout), you might need a professional anyway.
Whether you DIY or hire a professional, it’s important to clean your gutters as soon as possible after spotting a clog. That way, you can prevent any damage to your property.
Cleaning your gutters is one of the less glamorous parts of being a landlord. As much as we hate pulling gunk out of gutters, clean gutters are key to preventing problems ranging from mold to foundation damage.
If you can’t remember the last time you cleaned your gutters, don’t worry; you can start any time. And if you spot any of the signs of clogged gutters, you can try DIY gutter cleaning or hire a professional.
Another way to protect your property is with landlord insurance. From natural disasters, to fires, to any other unexpected event, landlord insurance can help you protect your investment. The easiest way to get landlord insurance is with Obie’s fast, modern, and transparent approach. You can even save up to 25% with Obie.
Get started protecting your property today with your free quote from Obie.
Picture this: You’ve successfully moved into your second house. You decided to keep your first house as a rental property — with the help of your new tenants, your property expenses are more than covered. You get to hold onto the property you put your sweat and tears into while earning passive income.
Sounds great, right? If only things could be as easy as a snap of your fingers. To get to the point of earning income through a rental property, you’ll need to learn how to successfully rent out a house. Renting out a house can be a long, stressful process if you don’t know what you’re doing. But with a little help from friends (us!), you can get the ball rolling sooner.
Before spending any time or money on your property, make sure your property is rentable. Look into your local laws — do you need a rental license? Research zoning laws, tax laws, and landlord tenant laws. Check your homeowners association covenant for specific rules on renting. You may also want to look into property management companies, if you would prefer someone to manage your property for you.
Lastly, research rent rates in your neighborhood or area to see how much you should charge for rent. Look for properties with similar square footage, rooms, and location. While you’ll want to charge enough to cover your expenses, if you charge too much, it’ll turn away prospective tenants.
Tip: As part of your research, look into your rights and responsibilities as a landlord. Understand what you are responsible for vs what responsibilities your tenants have. This can prevent conflict down the road and help both parties coexist successfully.
Next, you’ll want to make sure your property is a desirable place to live. Now is the time to go through your house thoroughly and look for any damages or repairs that need to be fixed. Legally, you need to adhere to safety standards in your state. This means having working smoke and carbon monoxide detectors, as well as meeting other local safety and building codes. Make sure to address any safety hazards such as missing railings, loose steps, and broken appliances.
Take note of the condition of your home. You’ll want to either do a walkthrough with your new tenant open move-in or have them fill out a move-in checklist, but now is the time for you to note how your property currently looks. Take photos.
Your rental lease agreement is the binding contract between you and your tenant. If you have a lease that’s too vague, you may be on the hook for certain damages. If your lease is too restricting, you may be infringing on your tenants’ rights.
One way to ensure your lease covers all rules, requirements, and disclosures, and without violating any local or federal laws, is to hire a lawyer to review the document. You can also go online and use a free template. Just remember that online templates may not cover everything you need.
Now that your property is in good shape and ready for showings, you’ll need to find tenants to move-in. Here you may want to list the help of a professional, such as a real estate agent, who can help with showings and open houses. You can also list your property on sites such as Craigslist, Zillow, or Trulia to draw in your own tenants.
Screening tenants can save you headaches later down the road. While certain laws are in place to prevent discrimination against race, sex, disability, religion and more, you can set rental criteria to make sure you rent to upstanding tenants.
Common criteria include a minimum credit score, sufficient income, positive references from previous landlords, a clean background check, and/or proof of steady income.
You may disqualify a tenant who has a low credit score, history of evictions, criminal history, or who doesn’t fit your screening requirements. Other valid disqualifications include rejecting a smoker for your smoke-free property or refusing to rent to someone who has a pet if you choose to keep your property pet-free.
If you were previously living at your property, you likely have a homeowners policy. While this was great for your previous situation, you’ll want to update to an insurance policy specifically for landlords. Homeowners insurance may not cover your tenants or your property if damage is done while you are not living there.
As soon as you find a tenant to inhabit your property, you’ll want to set up a landlord insurance policy. Landlord insurance doesn’t have to be complex. Obie makes the process straightforward and easy — you can get a quote in minutes without having to speak to anyone. Get your quote today.
At this point, you’ve successfully rented out your house. You’ve priced your rental just right to attract a trustworthy tenant, you’ve ensured your property is as safe as can be, and you’ve got your property insured against unforeseen events.
Now it’s time to start making that passive income. Collect a security deposit and place it in an escrow account, if applicable. Then, decide how you will collect rent. If you live close by and are planning on managing the property singlehandedly, you may prefer a direct check. Otherwise, you can use online rent collection tools for a quick and easy payment method.
As a landlord, you likely have more questions than “How do I rent out my house?” Check out our article, 11 Tips for First-Time Landlords, to learn more about being a landlord.
Drip drip drip. It’s that leaky faucet again. You’ve been meaning to get around to fixing it but haven’t had the time.
Besides, what’s the worst that could happen?
Unfortunately, even the smallest leak can lead to costly water damage, mold, and more. Good news: If it’s caught early, it can be easily fixed. To do that though, you need to know how to spot the signs of water damage on your property. We’ve rounded up 11 common signs of water damage to help you.
Notice any dark or discolored spots on your walls, ceilings, or floors? There’s a chance it could just be dirt, or it could be water damage.
Start by looking around toilets, sinks, washing machines, and other sources of plumbing. Water may have seeped down to floors below so remember to look up at the ceiling too.
Another sign of water damage is paint problems on the interior or exterior of your property. You should check for any paint that’s bubbling, cracking, flaking, or otherwise damaged. This can indicate that water is sitting behind your walls, siding, or any other painted surface.
Along with paint issues, problems with your flooring can also indicate water damage. Walk around barefoot. Water damage will cause carpets to feel damp, wood floors to warp, and vinyl flooring to buckle.
If you feel or see water damage to your floor, be sure to investigate. There’s a chance the subfloor is also damaged, which you’ll want to fix ASAP as it’s an important structural component.
While it’s normal for areas like bathrooms to be slightly humid after showers, most surfaces in your home shouldn’t be damp or moist. Feel your walls, especially around windows and pipes. If you feel any moisture where you wouldn’t expect it — you may have water damage.
Pooling water and puddles are also indicators your property could have water damage. Unless you had a flood, or your toilet is overflowing, you shouldn’t have pools of water anywhere.
Clean up any pooling water as soon as you see it to prevent further damage. If the water keeps coming back, you likely have a leak somewhere. Check out your basement or crawl space, as it’s the most common area for pooling water.
The outside of your property can also provide clues that you have water damage. Look at the grating and drainage of your property. If water flows towards or pools near your property, you could have water damage.
Cleaning your gutters is like going to the dentist — you should be doing it twice a year for optimal results. If you put it off, you’re in for a bad surprise when you see water overflowing onto your roof or foundation. Leaves and debris need to be cleared out so rainwater can be redirected away from your property.
If you’re diligent in your gutter cleaning, you should have no problem. Otherwise, check your gutters! They may need to be replaced to keep water flowing away from your house.
Your roof exists to protect your home from the elements. However, if it has missing shingles, is sagging, or even has a small hole, it's not keeping out water. Instead, your roof could be a source of water damage to your property. Part of this could be because of your gutters (see #7) or because of the age of your roof. Either way, you may want to call a roofing pro to check it out.
Hear that dripping sound even when the faucet is off? Water damage isn’t always visible. If you hear constant sounds of running water (even when no water should be running), it’s time to check your pipes for any leaks and inspect your walls for any damage behind them.
Not to be too obvious, but if it smells like mold — it probably is mold. Walk around and notice if there’s a particular area that smells musty. Maybe it’s down in the basement near a leaking water heater. Or perhaps it’s in the walls behind a sink. Mold can cause many health problems so if your water damage has progressed that far, it’s time to call in an expert.
If your tenants are complaining about a high water bill, it might be time to investigate. Either they’re taking way too long of a shower, or you have a leak that’s causing your property to use up more water than usual.
Inspect your property for leaky pipes or fixtures — or hire a plumber if you’re not sure what you’re looking for. It may be a simple fix that will prevent headaches down the road.
Finding water damage can be alarming. The key is to catch the problem early on. Whether that’s a leaky pipe, roof damage, poor drainage, or any other cause, you need to stop the water before you can address any damage.
Then, you need to work on repair. Hopefully the damage hasn’t spread yet. Start by cleaning up any standing water and then assess the area. You may need to remove drywall or flooring — a task you can do on your own or hire out.
Any mold, even the smallest spot, will need to be treated ASAP. Otherwise your tenants’ health could be at risk. We prefer calling in the professionals for this job.
Fixing water damage can be costly, especially if the damage has spread. But with the right landlord insurance, you could have help paying for repairs. Depending on your policy, you may be covered in the event of a burst pipe or ruptured water heater.
If you’re looking for the right landlord insurance, consider Obie. With Obie, you can get a transparent quote online in minutes. Plus, landlords save an average of 25% with Obie.
Get your landlord insurance quote today to protect your property from water damage and other damaging events.
You know you need landlord insurance. The only issue? Landlord insurance is confusing — especially trying to find the right policy. Two common policy options you’ve probably come across are dwelling policy 1 (DP1) and dwelling policy 3 (DP3).
But, what are the differences between those two policies? And how do you know which one is right for you and your property? We’re here to answer your questions. Let's start by taking a look at the differences between DP1 vs DP3.
DP1 insurance offers the least coverage of the dwelling policies. It is a named peril policy, which means that it only covers the perils explicitly stated in the policy.
These perils typically include damage from:
• Fire and smoke,
• Lightning,
• Explosion,
• Wind and hail,
• Riots, and
• Volcanos.
DP1 insurance typically doesn’t protect against many common damage-causing events including:
• Frozen pipes,
• Roof damage from falling trees,
• Theft, or
• Water damage.
DP1 generally only covers the main structure. However, you can sometimes add surrounding building (also known as other structures on your policy) and personal property coverage to DP1 insurance.
If your property is damaged by a covered peril, DP1 insurance will typically pay actual cash value (ACV) to repair the damage. ACV is the replacement cost minus any depreciation.
So, for example, if your 10-year-old roof is damaged in a covered peril, DP1 insurance will pay you what your 10-year-old roof is worth today — not the cost of a new roof today. This depreciated value is often well below what it costs to fully repair the damage. With DP1 insurance, you may have to pay tens of thousands out-of-pocket to fix any damage.
Whereas DP1 insurance offers the least coverage, DP3 insurance offers the most coverage. As such, DP3 insurance is the most popular landlord insurance.
DP3 insurance is an open peril/risk policy. This means it covers all damage-causing events except those explicitly listed in the policy. Some common exclusions you might see are nuclear hazards, war, and mold.
Along with being an open peril policy, DP3 insurance generally includes additional coverage like liability and personal item coverage. With liability coverage, you’re protected if a tenant injury occurs on your property. This coverage means you won’t be on the hook for the tenant’s medical or legal expenses. Many DP3 policies, but not all, will provide some coverage for your personal belongings at the home, such as appliances and lawn equipment.
With DP3 insurance, you can also add loss of rent coverage. A damaging event like a fire or natural disaster could make your property unlivable until it’s repaired. This means you can’t collect rent. If you have DP3 insurance with loss of rental income coverage, your insurance will pay you this lost rent if the damaging event is covered.
For any covered damage, DP3 insurance pays the replacement cost value (RCV) in most cases (an exemption example is in the case of a roof older than 15 years; here, depreciation would be factored in). Instead of paying for the depreciated value, RCV pays the current market rate for materials needed to repair your property. With DP3 insurance, you could receive the full amount needed to make any repairs — potentially saving you tens of thousands in out-of-pocket costs.
Now that you know some of the differences between the policies, you’re probably wondering which one is right for you.
If you’re on a very tight budget, DP1 insurance could work for you. Because it offers less coverage, DP1 premiums are generally lower than DP3 premiums. Just remember, cutting corners on cost now may backfire. If your property is damaged, you’ll end up paying more to repair it.
DP1 insurance could also work for you if you have a vacant property or expect to be without tenants for at least a month. Since there’s no one living in the property to cause damage, you likely don’t need as much coverage. This can make DP1 insurance a good fit.
However, if you want the most protection for your property, DP3 insurance is the way to go. It provides protection for the most events. And, DP3 insurances provide additional coverage for liability, personal items, or even loss of rent. Overall, DP3 insurance will protect your property better than with DP1 insurance.
You might also choose DP3 insurance if you want to reduce out-of-pocket costs. Your premiums will likely be higher with DP3 insurance, but the amount you have to pay if your property is damaged is often much lower. That’s because DP3 typically pays RCV for any damages. So, DP3 insurance is the right choice if you want to keep unexpected out-of-pocket costs to a minimum.
When choosing landlord insurance, you might be stumped on which dwelling policy to choose. DP1 insurance provides the least coverage and is cheaper. DP3 insurance provides comprehensive coverage with the option to add additional coverage. However, DP3 premiums tend to be higher.
We can't tell you which to choose, but we hope this article helps break down the differences in DP1 and DP3. Once you’ve figured out which dwelling policy is right for you, it’s time to get a quote. The easiest, fastest, and most transparent way to get your landlord insurance quote is with Obie. Completely online, Obie’s modern approach to landlord insurance saves landlords an average of 25% on insurance.
As the COVID-19 pandemic swept across the nation, everything closed — leading to record high unemployment and economic turmoil. Many faced widespread job losses and an alarming number of tenants couldn't pay their rent. But, having renters out on the streets or in homeless shelters could accelerate the already rapid spread of the COVID-19 virus. Because of this, Congress, and later the Centers for Disease Control and Prevention (CDC), decided evictions posed too large of a health risk and shouldn't continue.
More than a year later, the CDC has attempted to extend the eviction moratorium through October 3, 2021 for counties with high community transmission rates. Although the Supreme Court has ended the CDC moratorium, individual states have their own eviction protections still in place.
If you’re wondering what that means for you and your property, you’re in the right place. In this post, we’ll explain what a moratorium is, what you need to know about it, and what options you have if you’re struggling due to tenants not paying rent.
The eviction moratorium is a COVID-19 pandemic measure put into place in March 2020 by the CARES Act. It prevents landlords from evicting tenants due to nonpayment of rent. While the original moratorium expired on July 24, 2020, it has been extended several times since by the CDC.
While the eviction moratorium protects many tenants from eviction for not paying rent, tenants must meet the following criteria to qualify for protection:
• Earn less than $99,000 as a single person or $198,000 if married and filing jointly.
• Have attempted to get rental assistance to pay their rent.
• Are experiencing a large loss of household income due to things like losing a job, having work hours reduced, or having high medical expenses.
• Must be paying as much rent as they can.
• Need to show that they would be homeless if evicted or that they would have to move in with family or friends.
If a tenant can meet all those requirements, landlords cannot legally evict them under the moratorium. This stay on evictions is intended to give tenants time to recover financially. However, the eviction moratorium does not erase back rent. Tenants are still obligated to repay all missed rent once they cover financially.
Although the CDC attempted to prolong the national eviction moratorium in counties with high community transmission rates, the Supreme Court effectively ended this mandated moratorium as of August 26, 2021.
However, eviction moratoriums do still exist in some states with high transmission rates. States such as California, Illinois, Minnesota, New Jersey, New Mexico, and New York are a few states who have protections in place for tenants. See an updated list of state eviction protections to view all states.
While the eviction moratorium was designed with renters in mind, it significantly impacts landlords. During the eviction moratorium in 2020, renters fell behind an estimated $30-$70 billion in unpaid rent. As that figure is only for 2020, tenants are expected to be behind even further in 2021. Over six million households are currently struggling to pay rent.
This lack of rental income has caused several problems for landlords, especially small, mom-and-pop landlords. Without rental income, landlords may struggle to pay their mortgages and/or their property taxes. Plus, no rental income can make it impossible for landlords to maintain their property, leading to long-term property issues.
Although the eviction moratorium protects tenants from being homeless, it creates problems for landlords who are dependent on monthly rent.
Landlords who evict qualified tenants can face fines as high as $100,000. If the eviction results in a tenant's death, the maximum fine can jump to $250,000. Along with fines, landlords can also spend up to a year in jail for violating the moratorium.
Although the eviction moratorium prevents evictions for nonpayment of rent, it does allow landlords to evict tenants in certain situations. With a court order, landlords can evict tenants for any of the following reasons:
• Conducting criminal activity on the property.
• Endangering the health and safety of other tenants.
• Damaging or posing an immediate risk of damage to the property.
• Violating health and safety codes.
• Breaking the lease in ways other than nonpayment of rent or late fees.
If you're struggling due to tenants not paying rent, certain programs can help. The Consolidated Appropriations Act of 2021 created a $25 billion rental assistance relief fund. And, the American Rescue Plan Act of 2021 allotted a further $21.55 billion in emergency rental assistance for both landlords and tenants.
As a landlord, you can apply to this program to get 80% of the rent you're owed covered. In exchange for this rental assistance, you have to forgive the other 20% of what tenants owe. While this won't make up for all the rent owed, it can go a long way to help you pay for your mortgage, taxes, and other property expenses.
Tenants can also apply for rental assistance directly for up to 12 months. With this assistance, tenants can pay missed rent and utilities. By default, this rental assistance is paid directly to the person owed payment (such as the landlord). In the case that the landlord or utility providers don't want to accept direct payments, the assistance can be paid to the tenant.
At the beginning of the pandemic, Congress enacted an eviction moratorium, which was later extended by the CDC and then on a state-by-state basis. This eviction moratorium prevents landlords from evicting tenants due to nonpayment of rent if tenants qualify for protection. If you are a landlord or tenant struggling due to missed rent, rental assistance established by two congressional acts can help.
With eviction moratoriums still in place in a few states, the last thing you need to worry about is how to pay for damages to your property. Whether it's a natural disaster, an accidental fire, or other damages, you need the peace of mind and protection the right landlord insurance coverage can provide.
With Obie, you can save an average of 25% on landlord insurance. Not to mention the time you save by using Obie's modern, transparent, and completely online process.
Get your landlord insurance quote today to protect your property.
Fall brings to mind cozy sweaters, colorful leaves, and cooler weather. And for many homeowners, it may be a reminder that winter is coming and homes need to be winterized in preparation.
As a landlord, you may not have winterizing as a top-of-mind activity, especially if your rental property is in a state not known for cold weather. However, with the weather being increasingly unpredictable due to climate change, it’s a good idea for anyone to prepare their home for cold snaps.
Here, we’ve rounded up our top list of fall chores to help you prepare for winter. Get started early so your tenants aren’t left in the cold come winter.
If your home has gutters, there’s a good chance leaves and debris are collecting inside and blocking water from flowing down. Gutters should be cleaned twice a year, once in the fall and again in the spring.
There’s a reason gutter cleaning is a regularly outsourced job; chances are high that you have a local gutter cleaning company in your area. If you’re looking to save money, gutters can be cleaned out in a few hours with the help of a sturdy ladder, a small shovel, and a hose.
Left uncleaned, gutters can cause a whole host of problems. Overflowing gutters can lead to flooding in basements, water damage to the roof, and damage to landscaping. If you’re going to start with a chore, this one should be high-priority.
While you’re outside checking out your gutters, take a look at the exterior of your building. See any cracks between the siding, trim, windows, and doors? Caulk is an inexpensive way to close off these gaps and protect your house from cold air seeping in. You’ll stop moisture from coming in too, which can save you the worry of mold later down the road.
Sealing up holes will also prevent unwanted wildlife from sheltering in your home. Mice can fit through holes that are only millimeters wide, so be sure to not overlook even the smallest of gaps. We love our furry friends, but we’d prefer them not to be chewing through bags of food in the pantry.
Servicing your HVAC system should be a must-do on any landlord’s maintenance list. Furnace filters should be changed about every three months, depending on usage and size of the filters. Letting your filters get too dirty can lead to a faster breakdown of your furnace and inefficiencies.
An HVAC technician will also check to make sure your furnace is running properly, that there are no leaks or problems with wiring, and that your thermostat is working efficiently.
Tip: Companies are busier with emergency calls for broken furnaces later in the season. If you don’t want to be the emergency call, schedule your service before a cold snap hits.
There’s nothing worse than getting a call in the middle of the night from your tenants after a pipe has burst. Flooding, water damage, mold...the list of problems this can cause goes on.
Be prepared early. If applicable, turn off your outdoor water supply or insulate it using pipe foam insulation. Disconnect any hoses and let the water fully drain out. Check the outside of your building for any cracks — cold air can seep in here and lower the indoor temperature, causing pipes to freeze and burst.
Tip: Tell your tenants to keep the thermostat at 55 degrees or higher, even if they are going out of town. This can prevent your indoor pipes from freezing while the unit is unoccupied.
Chimney sweepers have evolved since Mary Poppins’ time. If you have a chimney in your property, it’s recommended you have your chimney inspected and cleaned by a professional once a year. Without this, flammable creosote may build up and cause an unwanted fire.
Think your tenant doesn’t use the fireplace? You may have some unpaying tenants you don’t know about — squirrels, birds, and other critters often seek refuge inside chimneys. Regularly attending to your chimney can clear these friends out and keep your flue clear.
Don’t leave your tenants to brave icy sidewalks on their own. Whether or not you have snow removal in your rental agreements, be a good landlord and keep a bag of a deicing agent such as salt or sand in any common outdoor spaces.
Tip: Only use as much deicer as needed. Salt can damage wood, rust metal, and harm plants.
No one wants a tenant to slip and fall on their property. If you don’t provide snow removal services, consider keeping a shovel on-hand in a common area such as a basement or garage.
If you own a larger property, such as an apartment building, you may be legally required to clear snow from sidewalks, driveways, parking lots, and other common areas.
Hiring out snow removal reduces liability for people falling or hurting themselves on your property. For buildings with parking lots, it’s worth hiring a plowing service to clear the way for your tenants’ vehicles.
Tip: Snow removal companies book up — don’t wait until the first major snowfall to call. Start researching companies in the fall to sign a contract before winter.
In addition to hiring a snow removal company, consider a landscaping company to help clean up leaves, trim dead branches, and aerate your lawn. If you have a smaller yard, these are likely easier chores. Make sure to rake well — leaves left on the ground all winter will smother grass, leaving you with dead spots come spring.
Also keep an eye on any overhanging branches on your roof or garage. Heavy snow can snap these branches, causing damage to the exterior of your house.
While winter weather has certainly been unpredictable these past few years, there’s one thing we know for sure: you can never be too over prepared when it comes to your investment property. Being proactive now saves time, money, and headaches later down the road. Follow this fall checklist for homeowners to reduce your chance of damage to your home or your tenants.
You can never be too careful though — and that’s where landlord insurance comes into play. Does your insurance cover everything you need it to? Try Obie, instant and modern insurance for landlords. No paperwork. No hassle. You’ll get a quote same-day.
Do you regularly inspect your rental property? Sure, you invest in your property upfront. Buying it, updating it, advertising it, and more.
But, do you periodically check on your investment once renters move in? If you’re like many landlords, the answer is no.
However, without regular inspections, you’ll miss small problems until they become costly and difficult to fix. And, you have no idea how well tenants are taking care of your property. So, routine inspections are a must if you want to protect your investment.
How should you conduct regular inspections? That’s what we’ll cover in this post. But, first, let’s take a look at what exactly property inspections are.
A rental property inspection is a survey of the condition of your property inside and out. By looking at things such as walls, floors, faucets, landscaping, and more, you can get an idea of how tenants are taking care of your property.
Rental property inspections help you get in front of issues. For example, your tenants might notice a leaky faucet. But, they don’t think it’s a big deal. So, they don’t mention it to you until water damage signs are obvious. If you had inspected your property, you could have addressed the leaky faucet before it caused expensive water damage.
And, property inspections also help you reduce your liability. By regularly inspecting your property, you can find any potential injury-causing problems. And, fix them quickly. This minimizes the risk of tenant injury and your liability.
There are 4 main types of rental property inspections:
A move-in inspection happens when a new tenant moves into your property. You walk through the property with the tenant and record its condition. That way, you know what damage was already there. And, what damage your tenant caused when they move out.
As the name suggests, you conduct this inspection by driving by your property. This is a quick way to check for exterior issues. And, check for any tenant problems – such as unauthorized roommates or pets. You should do drive-by inspections on different days and times. That way, you can catch a variety of problems.
Routine inspections involve going into your property to check for any issues. Generally, you walk through the interior and around the exterior with the tenant. You should check for any issues tenants miss – like leaky faucets that could be causing water damage. And, you should check for tenant damages – so they can fix them before moving out. Tenants can also bring any issues they’ve noticed to your attention during routine inspections.
When your tenants move out, you also need to do an inspection. You should compare the current condition of the property with your notes from the move-in inspection. While wear and tear is expected, you should check to make sure tenants haven’t damaged anything. If you do find tenant damages, you can usually pay for the repairs with the security deposit.
Although you own your property, you don’t have the right to access it whenever after you rent it out. Tenants have the legal right to privacy and quiet enjoyment of their home. So, you can’t spring random inspections on tenants. And, you can’t inspect so frequently that it makes it impossible for tenants to have quiet enjoyment.
To make sure your inspections are legal, you should give tenants at least 24-hour notice before entering the property. Some states require 48-hour notice or more. So, you should check your state laws to make sure you’re notifying tenants early enough.
You should also explain to tenants the purpose of the inspection. That way, tenants don’t feel like you’re arbitrarily showing up just to bug them.
And, you shouldn’t inspect more than every three months. Otherwise, you could be preventing your tenants from quiet enjoyment of their home. While these tips are a starting point, always be sure to check your state laws before conducting routine inspections.
There is no one-size-fits-all for how often you should inspect your property. However, a common routine inspection schedule is either quarterly or twice a year. You can also do seasonal inspections twice yearly to make sure your HVAC and other seasonal equipment is in good shape.
Here are the top areas you should check during your routine inspections:
You should look at all aspects of the outside of your property. From roofing, to gutters, to siding, and more, you should check to make sure everything is in working order. You should also check on any trees and plants. Dead trees can be a hazard to your property. And, a weed-infested and messy yard can lead to neighbor complaints.
While you need to check specific aspects of the inside of your property, it’s also a good idea to access the overall condition. You should take notice of any odors, clutter, overflowing trash, and other signs your tenants may not be taking care of your property.
You should inspect for any holes in the walls or unauthorized paint. For the floors, you should check the condition of any carpet, wood, or other flooring. Any tears in the carpet are easy to fix if you catch them early. The same is true for scruffs or scrapes on wood floors. If you notice any of these issues caused by tenants, you can ask them to change problematic behavior (like dragging furniture) to prevent further issues.
For doors and windows, you should check for any cracks, loose seals, or leaks. You should also make sure door and window locks are working properly. And, check to make sure tenants haven’t rekeyed any locks.
It’s easy for tenants to miss water leaks, especially when they’re in out of the way places (like under the kitchen sink). Water leaks are much easier to fix than damage. So, you want to catch leaks before they lead to damage.
You should also look for any mold. Even if you don’t find mold, you should make sure your property is as mold-proof as possible. This includes lower humidity, regular bathroom cleanings with mold killers, and even mold-resistant paint. That way, you can prevent the problem – instead of paying for costly mold remediation.
Another area you should inspect is appliances. You want to make sure they’re clean and in working order. This reduces the chance of any appliance fires or other dangerous malfunctions.
Clean air filters are essential to a properly functioning HVAC. Dirty air filters put more strain on your HVAC – shortening its lifespan. So, you might have to replace it sooner if your tenants aren’t changing air filters at least quarterly. During your inspection, you should check the air filters. And, discuss with tenants the importance of routinely changing their air filters.
Smoke and carbon monoxide detectors save lives. So, it’s important to make sure all smoke and carbon monoxide detectors are working during your inspection. Plus, even though tenants are responsible for changing detector batteries, you could face liability problems if tenants are injured due to detectors not working.
Pests like termites, mice, ants, bees, scorpions, and more can all cause issues for your tenants and your property. So, you should regularly inspect your property for any pests. And, you should have your property routinely sprayed to prevent pests.
Whether you allow some pets or none at all, you don’t want unauthorized pets on your property. However, most tenants won’t have unauthorized pets present for routine inspections. So, to catch any unauthorized pets, you should look for signs like pet toys, hair, or even chew marks.
The smell of smoke can be almost impossible to get rid of. You have to strip all paint and completely replace any carpet. So, if your lease prohibits smoking, be sure to check for any signs of smoking during your inspection. That way, you can catch and stop it early – minimizing damage.
Your tenants live on your property every day. So, they’re a great resource for uncovering problems. During your inspection, be sure to ask tenants if they’ve noticed any problems. If they have, you should fix them promptly. That way, you can reduce any damage and minimize your liability.
Property inspections can help you catch any problems before they become costly to resolve. Whether the issues are tenant caused or not, property inspections help you avoid any unwanted surprises. And, routine inspections can help you minimize the likelihood of tenant injury and your liability.
While property inspections can help you catch problems, there are some issues out of your control. Events like natural disasters, floods, and accidental fires can cause significant damage to your property. And, it’s hard to prepare for these problems.
So, what can you do to protect your property from these types of events?
The right landlord insurance is your best bet. Landlord insurance can help you pay for repairs. And, some policies can even help replace lost rental income.
Looking for great landlord insurance? Consider Obie. We take a modern approach to landlord insurance – with a fast, transparent, and online quote. And, you could save an average of 25%.
Get an instant landlord insurance quote online today to fully protect your property.
You get a call — your tenant is seriously injured. He was walking up the front steps of your rental when he fell, breaking his leg and pelvis. He needs surgery and will be out of work until it heals.
Of course, you feel bad. That step has always been uneven. And, you have to walk carefully over it not to fall. You hope your tenant recovers quickly and can get back to his life. But, that’s the end of it for you, right?
Unfortunately, no. You could be held liable for your tenant’s injury. So, your tenant could sue you to recoup medical costs and any other damages. This can range from tens of thousands to hundreds of thousands of dollars or more. Not to mention the lawyer fees you have to pay to mount your defense.
If you didn’t know you could be held liable for tenants injuring themselves on your property, you’re not alone. In this post, we’ll cover when you could be liable for tenant injuries. And, steps to protect yourself from liability. Let’s get started by looking at when you might be liable:
The good news is that you aren’t liable for every tenant injury. You’re only liable for injuries caused/contributed to by something you did or didn’t do (like not fixing a broken step). Or, when you acted carelessly.
Here’s a deeper look into some scenarios when you could be liable for tenant injuries:
If you know of something that could injure your tenants but don’t tell them, you could be held liable.
For example, your rental might have an uneven floor. The unevenness has caused you and previous tenants to trip frequently. But, you don’t mention it to the current tenants. If your tenants injure themselves because of that uneven floor, you could be held liable.
Any maintenance you’re supposed to do (like maintaining common areas) but don’t could result in liability if your tenants are injured
For example, you’re supposed to maintain common areas in multi-unit properties. But, if you fail to maintain a railing in the common area stairs, you could be liable if a tenant falls and is injured.
You could also be held liable if you fail to prevent a reasonably foreseeable accident.
For example, if there’s a loose gutter you need to repair, you could be held liable if it falls and injures your tenant. It’s reasonably foreseeable that an unsecured gutter could fall and hurt someone. So, you could be held liable for not fixing the gutter or not putting signage warning tenants during repairs.
If your tenants inform you of a safety concern, you could be held liable for not fixing it. You could also be held liable for not fixing it promptly.
For example, your tenant might inform you of growing damage to a support column in their parking area. If you do nothing to fix this problem, you could be held liable if the parking structure collapses and injures your tenant. You could also be held liable if you take too long to address the problem, during which time your tenant is injured.
Even if you do fix a problem, you could be held liable for tenant injury if you fix the problem carelessly.
For example, you might fix a broken stair. However, you fix it haphazardly, without making sure it can support the right amount of weight. If your tenant falls through that step and gets injured, you could be held liable for that injury.
While you’re not liable for all crimes that happen on your property, you can be held liable in certain instances. If you don’t inform tenants of past criminal incidents or take measures to prevent them, you could be held liable for tenant injury.
For example, your rental might have been broken into in the past. However, you don’t mention that to your tenants. And, you don’t increase security to keep it from happening again. If your tenant is injured due to a break-in, you could be held liable.
If you violate safety laws on your property and your tenant is injured, you could be held liable.
For example, your rental may have wiring that’s not up to code. But, you don’t fix it. If tenants are injured in a fire sparked by unsafe wiring, you could be held liable for their injuries because you violated the law.
This isn’t an exhaustive list of all scenarios when you could be held liable for tenant injury. You could be held liable for any situation you know of that could cause tenant injury. But, it does cover some of the most common liability cases.
While you can be held liable for many tenant injuries, you aren’t liable for every injury. One of the most common situations you won’t be liable for is when tenants cause their own injury.
If your tenant falls on your stairs, it might not be your fault. The tenant may have failed to tie his shoe. A court could find that the failure to tie the shoe was a larger cause of the accident than any unevenness on the stairs. In this case, you aren’t liable for tenant injury because it was his fault.
You can’t eliminate all possible injury-causing situations. However, you can take steps to minimize the likelihood of tenant injury and your liability.
One way to minimize liability issues is to regularly inspect your property. With regular inspections, you can uncover issues. And, fix them before they can injure tenants.
Another way to prevent liability issues is to fix any problems you know of quickly. If a tenant informs you of a broken stair railing, you should fix it as soon as possible. You shouldn’t wait weeks or months to take action. Instead, you should fix it the next day to avoid potential liability.
You should also conduct preventive maintenance. By regularly maintaining crucial systems (like HVAC) and structures (like stairs), you can keep your property in great shape. This helps you prevent any problems from happening – instead of just fixing them after the fact.
Taking these steps can help you reduce your liability for tenant injury.
Minimizing injury-causing situations might not be enough. Even with the proper precautions, your tenants could get injured. And, you could be held liable.
So, what can you do to protect yourself if this happens?
The best way to minimize losses related to injury liability is to get landlord insurance. Your homeowner’s insurance policy likely doesn’t provide the right liability coverage. If you rely on homeowner’s insurance for your rental property, you could be on the hook for all tenant medical and legal expenses related to the injury.
You should make sure your landlord insurance policy comes with liability protection. The average landlord liability insurance usually provides $1,000,000 in liability coverage. If you have a lot of rentals, you might want to look into more liability coverage.
Protect yourself and your investment today by getting your Obie landlord insurance quote. It’s fast and easy to get your quote. And you can save up to 25% on landlord insurance.
Do you really need landlord insurance? You already have a homeowners policy that’s worked great for your home. So, it should provide enough coverage for your rental, right? Unfortunately, it won’t.
A homeowner’s policy won’t cover a home you don’t live in. If you only have a homeowners policy to protect your rental property, you will have to pay for any damages that would normally be covered by a home policy. In this post, we’ll cover the difference between homeowners and landlord insurance. And, how to know which is right for you. To start, let’s look at the similarities of both policies.
For this comparison, we’re going to look at HO3 (homeowner) and DP3 (landlord) policies. HO3 is the most common homeowners insurance policy. It is an open peril/risk policy. So, your property is protected from most damage, except for any perils explicitly excluded in your policy.
DP3 is also an open peril/risk policy. Some common exclusions for DP3 policies are earth movement, flood, power failure, mold, neglect, and government action. But, always refer to your exclusions specific policy for all exclusions.
Both HO3 and DP3 policies cover the residence. And, they can cover any other structures on the property. Plus, both policies can cover personal items, loss of use, and personal liability.
Now that you know how they’re similar, let’s move on to how they differ.
Both HO3 and DP3 policies offer similar coverage. However, what coverage is standard and what risks each policy protects against are different. Here’s a look at these differences:
*Ask your insurance provider or review your policy documents to confirm your coverage and limits.
Landlord insurance is designed to protect a property you don’t live in. So, DP3 policies usually cover the residence and can cover other structures on the property.
Unlike HO3 policies, DP3 policies generally don’t cover personal property. However, DP3 policies can cover items you leave on the property – like appliances or a lawnmower. So, your tenants need rental insurance to cover their items.
Landlord insurance can also offer loss of rent coverage. If tenants can’t live on your property due to a covered claim, this insurance could cover your lost rent. That way, you don’t have to worry about making up for rent while doing repairs.
Another difference between HO3 and DP3 policies is liability protection. HO3 policies generally have standard liability protection. But, it doesn’t extend to business activities – like renting out your property.
With DP3, you need to add liability protection. This protection covers business-related liability. For landlords, $1,000.000 in liability coverage is recommended. This protects you if tenants injure themselves on your property due to your negligence. So, you’re not on the hook for their medical and legal expenses.
One last difference between HO3 and DP3 policies is cost. Landlord insurance generally costs 15-20% more than homeowners insurance. That’s because insuring renters is more risky. Renters cause more damage and claims than homeowners, which is most costly for your insurance company.
If you’re renting a property, landlord insurance is probably the right choice. HO3 and DP3 policies have similar core offerings. A major difference is that HO3 policies cover a home you live in. And, DP3 policies cover a home you rent out. So, if you rent out your property, a homeowners policy likely won’t cover it. That means you need landlord insurance to be protected in the event of damage to your property. Or, if you’re liable for tenant injuries.
The exception to this is if you rent out part of your primary residence. If you rent out a room or your basement, landlord insurance usually won’t cover you. In that case, you should get a comprehensive homeowners policy instead. Protect yourself and your investment today by getting your landlord insurance quote from Obie.
So, you want to be a landlord? You want to rent out your property to earn extra income and build wealth. Plus, it’s pretty easy to rent out a home, right?
You just need to post an ad and great tenants will find you. Or so you think.
Unfortunately, renting out your property is a bit more complicated. Good tenants can be hard to find. And, keeping your property in good physical, financial, and legal shape can be challenging. Especially for a first-time landlord.
However, with a solid plan and the right tips, you can be a successful landlord. That’s why we created this post. In it, you’ll learn the top tips to help you thrive as a landlord. Let’s start with the first tip – screen your tenants.
Having good tenants is essential to having a successful rental property. Good tenants pay rent on time. And, they take care of your property. Bad tenants, however, rarely pay rent on time (or at all). And, they can cause extensive damage to your property. This could end up costing you more than you make from your rental.
So, how can you make sure you have good tenants?
You should conduct a background and credit check. And, you should look for tenants with steady income, no history of evictions, a good credit score, references from past landlords, and a history of making payments on time (to name a few).
If you screen your tenants properly, you’ll end up with good people as your tenants. As cool as your tenants may be, you shouldn’t befriend them.
You’re in a business relationship with your tenants. At the beginning of every month, you need to collect money from them. It’s harder to collect rent from or charge late fees to friends. Or, if the worst happens, evict them.
So, it’s important to be approachable and friendly, while maintaining a professional relationship.
If you price your rental too high, no one will rent it. But, if you price it too low, you’ll lose money each month. Plus, having your property priced correctly can help you get tenants quickly.
When setting your rate, you should look at other similar properties nearby. This can give you a base rental price. Then, you can adjust it up or down based on interior finishings, amenities, neighborhood desirability, and more.
It’s important to make sure your rental rate covers your expenses. Like mortgage, maintenance, and HOA. And, you should aim to make a profit on top of covering your expenses. Pricing your property right can help you do that and attract great tenants.
To get the most for your property, it needs to be in good shape. Not outdated or dirty. So, you should think about sprucing up your rental with things like a fresh coat of paint, durable and stylish flooring, and midrange appliances (if needed).
However, you should avoid any over-the-top upgrades. Renters won’t pay significantly more for top-of-the-line appliances, quartz counters, or spa bathrooms. So, you won’t get a good return on investment for lavish projects.
Making sure your tenants pay rent is your top priority. If tenants have to jump through hoops to pay rent, they’re less likely to pay rent on time – or at all.
So, it should be easy for tenants to pay rent. Technology is a great way to make paying rent easy. One option is an online rent portal. You could also have an app tenants can use to pay rent. Whatever tech you choose should make it effortless for tenants to pay rent.
The last thing you want is to get in legal trouble over your rental property. So, you need to know federal, state, and local rent laws. That way, you know how you might have to accommodate tenants. And, what rights tenants may have once they move in that could be detrimental to you.
Your lease is a legally binding agreement on rules you and your tenant have to follow. If you have a weak lease, your tenant could get away with paying rent late, damaging your property, and more.
A good lease should have the rental term, rental amount, payment schedule, rental insurance requirements, repair and maintenance policies, maximum number of occupants, and rules and regulations (to name a few).
Renting property is a business. As such, you need to keep detailed records of your income and expenses. Otherwise, you won’t know if your property is profitable. And, you’ll lack the documentation you need at tax time.
You should also keep records of leases, tenant documents, interactions with tenants, and more. That way, you have records in case of a problem down the road. Or, if tenants need their rental records.
When you first start renting your property, it’s tempting to spend rental income. After you pay your mortgage, your rental profit is fair game, right?
Not exactly. It’s a smart idea to save excess rental income in an emergency fund. That way, if you find yourself without tenants unexpectedly, you can still pay your mortgage. You should save 3-6 months mortgage and expenses to make sure you’ve covered.
Running a rental property is so much more than just finding tenants. You need to make sure you’re legally protected. And, you need to have your finances in order. Plus, you need to fix things that go wrong on your property and do regular maintenance.
You can’t do everything your property needs yourself. So, you need a great team to help. Your team should have an accountant, handyman, rental/eviction attorney, real estate agent, appraiser, and insurance provider (among others). That way, when something goes wrong, you have a team of professionals to help you get through it.
Often overlooked, landlord insurance is crucial to your success as a landlord. If a natural disaster strikes, a fire burns down your property, or any other event damages your rental, you could have to pay for the repairs yourself.
You could also be on the hook for repairs if you have a homeowner’s insurance policy instead of a landlord insurance policy.
However, if you have landlord insurance, you could get help paying for repairs. And, landlord insurance could protect you from liability if tenants injure themselves on your property. Plus, landlord insurance could compensate you for missed rent while making repairs.
With all the time and resources you put into being a landlord, it only makes sense to protect your investment.
Being a first-time landlord is exciting. It offers you an additional revenue stream. And, helps you get the most out of your property.
But, it can also be challenging to ensure your property is profitable. You need great tenants, the right rental rate, an awesome team, and more. Following the tips in this article can help you reach profitability quicker. And, with less stress.
One way to make being a landlord less stressful is by choosing the right landlord insurance provider. The traditional landlord insurance process is time-consuming and tedious. Instead, choose the modern approach. That’s what we do at Obie. You can get a quote in minutes. And, the process is online and transparent.
Plus, with Obie, you could save an average of 25% on landlord insurance.
Protect your rental property by getting your quote from Obie today.
It is an important day for the Obie team. Today we are announcing an $10.7M Series A led by Michael Brown and Battery Ventures who are joined by a host of new and previous investors including Thomvest Ventures, Funders Club, Second Century Ventures, and Metaprop.
We are a company started by two brothers – first real estate investors and now insurance junkies. We saw chronic problems throughout the real estate insurance market so we’re reinventing the process from the bottom up. We are starting at the intersection of insurance and technology which allows us to address the insurance needs of independent investors and landlords that have largely been ignored by insurance carriers despite the majority of real estate investment being in small unit count and small square foot properties.
Whether you are a landlord with one rental or an investor with over 2,500 units, the process to obtain insurance is dysfunctional. We knew this process needed to change. That notion, and a love for building products that make people happy, became our mission.
We are proud to be reinventing the insurance experience by providing a simple, affordable, and transparent insurance process for landlords and real estate investors. We are using technology to make the process faster and more efficient, and humans to help make the experience more friendly and enjoyable. Whether you are a seasoned investor or just getting started, Obie is right for you. We treat all our customers how we would want to be treated, a philosophy that has allowed us to offer the best insurance and cover over $3.5 billion in rental property within the past 24 months.
Building something from the ground up is incredibly hard; building something that challenges the status quo is even harder.
We have been building a team that is diverse in knowledge and experience and half of our team are landlords themselves - we understand the problems first-hand and are committed to finding a solution. We could not do any of this without our team members, both past and present. This announcement is dedicated to each one of you:
Aaron, Adam, Andrew, Audrey, Brian, Bryan, Brandon, Curtis, David, Dominic, Danielle, Evan, Erin, Giancarlo, Geo, Huy, Joe, JB, John, Jonathan, Kara, Laura, Leslie, Matt, Nem, Nikita, Pablo A. and Pablo B., Richard, Ryan, Steve, Tim, Thomas, and Zack.
Thank you for your hard work. You have made it possible to get this far.
Interested in joining the team? We are hiring! We have a few openings for some impressive people that want to join us for this journey.
Want to learn more about Obie? Get a quote.
Please send any press inquiries to press@obierisk.com
It’s the middle of the night. Your tenants are sound asleep. Outside, a storm is raging. Lighting flashes every few seconds.
After a loud clap of thunder, a stray bolt of lightning hits your property – catching it on fire. Your tenants make it out safely. However, your property isn’t as lucky — it has extensive fire damage. And, until you repair it, your tenants can’t live there.
But, how are you going to pay for repairs? And, how are you going to make up for lost rental revenue during repairs?
If you have the right landlord insurance policy, you don’t have to worry. The replacement value of your property could be covered. And, some policies will also cover lost rental revenue. All you have to pay is a deductible.
However, if you have a standard homeowner’s insurance policy, everything won’t be covered. As such, you’ll be on the hook for tens of thousands to repair your property.
To fully protect your property, you need a landlord insurance policy. Don’t know how to choose the right one? We’ve got you covered. In this guide, you’ll find everything you need to know about landlord insurance. To start, let’s look at what exactly landlord insurance is.
Landlord insurance (also known as a dwelling fire policy) provides financial protection if your property is damaged or becomes unlivable after events like fires.
Unlike homeowner’s policies, landlord insurance typically doesn’t cover all contents of your property. Some contents like fixtures could be covered. Instead, it covers the dwelling itself, surrounding structures, and anything you leave there to help maintain the property (like a lawnmower).
While not in every landlord insurance policy, you should make sure your policy specifically covers lost rent due to damage to your property. This lost rent coverage doesn’t cover vacancies unrelated to property damage. And, some landlord insurance policies also offer liability protection. If someone gets injured on your property, this liability coverage protects you from having to pay for their expenses out of pocket.
A landlord insurance policy covers your property – not the contents. But, what exactly does this coverage include?
It depends on the policy you choose. There are 3 common landlord insurance policies:
DP (dwelling policy)1 insurance has the least coverage of the 3 types. This insurance only covers 10 perils – which are events that could cause damage. If your property is damaged by a peril that’s not included, the policy doesn’t help you pay for repairs.
If one of those events happens, the policy will pay you the actual cash value (ACV) to repair the damage. ACV is the replacement cost minus any depreciation.
There can be tens of thousands of dollars difference between depreciated materials and new materials. As such, you have to pay more out of pocket to fully repair your property.
DP3 offers the most comprehensive coverage. It’s also the most popular landlord insurance type. Instead of only covering specified perils, DP3 is an open peril/risk policy. So, it covers a wide variety of damage causes.
Unlike DP1 policies, DP3 policies may pay out replacement cost value (RCV). So, if your property is damaged by a covered event, your insurance may pay out the full cost to restore your property to its undamaged condition. Not the depreciated value of the materials. This can save you tens of thousands of dollars if your property is ever damaged.
And, DP3 insurance can also cover loss of rent. If you can’t pay your mortgage without rental income, you should consider having loss of rent coverage. That way, you don’t risk losing your property if damage occurs.
And, DP3 policies generally include liability protection. If a tenant injured themselves on your property, you could have to pay for their medical expenses. With DP3, your insurance will cover any medical expenses related to liability.
Business owner policies are typically for small, low-risk businesses – like real estate investments.
A Landlord BOP combines business property and liability coverage into one policy. So, it can cover damage to your property. And, it can protect you in the case of liability from things like tenant injuries on your property.
This policy can also include loss of income protection. If tenants can’t live in your property while you’re repairing covered damage, a landlord business owner policy could compensate you for this missed rent.
Along with the main landlord insurance types, you can also opt for supplemental coverage for events not covered by your policy. Some examples include vandalism and burglary coverage and building code protection. If any of these events happen, you’ll be protected if you choose optional coverage.
What’s covered is determined by the policy type you choose. But, there are a few things that aren’t covered by landlord insurance.
Your landlord insurance won’t cover all appliance breakdowns or equipment (like your furnace) malfunctions. Some mechanical problems and equipment breakdowns could be covered. But, you may have to pay out of pocket to fix maintenance or equipment issues.
Landlord insurance protects your property, mainly the dwelling itself. It doesn’t include any protection for tenant items – like their furniture or other personal belongings. So, it’s always a good idea to encourage tenants to have a rental policy. That way, both you and your tenant are protected in the event of damage.
If you live on the property and rent out part of it, a landlord policy likely won’t cover anything. It’s best to get a comprehensive homeowner’s policy if you own a shared property.
At first glance, homeowner’s and landlord insurance can seem nearly identical. But, landlord insurance offers a few important benefits that make it essential for every landlord.
Many homeowner’s policies offer personal liability coverage. However, this liability protection doesn’t extend to business activities – like renting out property. So, if you rely on a homeowner’s policy, you could be on the hook for tenant medical expenses if they’re injured.
Landlord insurance provides business liability protection. So, you’re covered if any injuries happen on your property.
Homeowner’s policies focus on covering the structure and its contents.
Instead, you need specialized coverage like lost rental income or ordinance and law coverage. If you rely only on a homeowner’s policy, you’ll have to make up for the lost rent on your own. Or, pay for building code updates during repairs yourself. So, having a landlord insurance policy ensures you’re better covered.
Some homeowner’s policies won’t cover a property you don’t live in. So, you might think your rental property is covered by your homeowner’s policy. But, when you need to file a claim, you’ll find that the property isn’t covered because you don’t live there.
To avoid paying for repairs entirely out of pocket, you need a landlord-specific policy. Since these policies are made for landlords, you can rest easy knowing you’re covered.
Landlord insurance usually costs between 15-20% more than homeowner’s insurance. That’s because insuring renters is a higher risk. Since they don’t own the property, renters aren’t as careful. This results in more damage and claims – which costs the insurance company more.
In recent years, the average homeowner’s insurance policy costs $1,249 a year. So, at a 20% increase, the average landlord insurance policy costs $1,499 yearly. Things like age, location, and rental type (short vs. long-term) play a role in how much your landlord insurance will cost.
While landlord insurance is more expensive, there are ways you can lower your premium. One way to do that is with security and smart home features. They provide an early warning for problems like break-ins, flooding, and more. Having these features means any problems will be less severe – lowering your insurance risk and premium.
You know you need landlord insurance. But, where do you start? With a quote of course!
The traditional process for getting your quote can be time-consuming. You go back and forth with your broker trying to find the right policy. But, brokers can be slow to respond. So, you have to wait and wait and wait for your quote.
And, when you get your quote, you have no idea why it costs what it does. Comparison shopping for landlord insurance can make the process even more time-consuming and frustrating. So, it hardly seems worth it. But, you have no idea if you’re overpaying.
Don’t go through the lengthy and difficult traditional landlord insurance process. Instead, take the modern approach. That’s what we specialize in at Obie. With our innovative approach, you can get a quote in minutes. And, the whole process is online and transparent.
The best part? Landlords save an average of 25% on insurance with Obie.
If you want the right coverage at an awesome price, get started by getting your quote from Obie today.
The COVID-19 pandemic has brought a lot of challenges for tenants and landlords alike. With an eviction moratorium in place for most of 2020 and still in some states in 2021, landlords have faced pressure to keep tenants on, regardless of their ability to pay rent.
This loss of rental income may be a burden to landlords dependent on rent to pay their mortgage, property taxes, and general expenses. If you are a landlord who has suffered a loss of rental income, keep reading to find out if your landlord insurance can cover you.
The short answer is yes, but only if you have the right type of insurance. While homeowners insurance will provide some liability and property damage coverage in case of an event such as a fire, landlord insurance adds extra coverage to protect landlords from risks associated with renting a property. This includes coverage for loss of rental income.
Commercial property owners might have rental loss insurance as part of a commercial real estate policy or business interruption insurance, which covers income loss due to an unexpected event.
Landlord insurance, also called rental property insurance, covers risks associated with renting your home, apartment, or condominium to tenants for long periods of time. Coverage typically includes loss of rental income for landlords along with property damage and liability costs. A landlord insurance policy is often recommended for homeowners who rent a property for at least six months.
Loss of rental income protects landlords against the risk that a property will be unable to be rented out due to damage caused by an event covered by insurance, such as fire, lightning, wind, or hail. This rental reimbursement will ensure you do not lose the income you would have collected from rent.
A property owner’s commercial real estate insurance also may include rental loss insurance. This coverage often covers one month of rental income, but extended coverage can be added. Rental loss insurance also could be included in business interruption insurance.
Rental income losses can be reported on the Internal Revenue Service tax form 1040 Schedule E. For tax purposes, rental property losses often are considered passive losses. A passive activity loss (PAL) allows owners to deduct losses if they collect income from other sources, such as positive income from another rental property. If your rental income does not cover your losses in the tax year, you typically can carry the excess forward into future tax years.
If you are in the property management business working in activities related to that business at least half of your annual working hours, rental property income may be considered active income for taxes. A real estate professional also can deduct rental income losses. If you actively participated in a rental real estate activity, you may be able to deduct up to $25,000 of loss incurred from a rental property. Check the IRS guidelines on the rules for more information.
Note that the IRS requires taxpayers to turn a profit from a business in at least three of five consecutive years. If you claim a loss for three out of five years, the IRS will classify your business as a hobby, meaning you cannot claim related expenses on your taxes.
Landlord insurance and rental property insurance policies often include coverage to protect you and your business from a potential loss of income due to unexpected events. Policies can vary, so it is important to check with your insurer to confirm that the coverage includes what you need.
Looking for a new landlord insurance? Try Obie, a tech-enabled insurance with competitive rates and instant quotes. No hassle. No paperwork. See how you can get instant coverage with Obie. Start your quote now.
Natural disasters are a nightmare for your property. From brutal winter storms to hurricanes, wildfires, tornados, and more, natural disasters can cause havoc on your property.
After a disaster, cleanup isn’t the only thing you have to worry about. While you’re busy trying to repair broken pipes or patch your roof, scammers are looking to make a quick buck at your expense.
If you’re not careful, these fraudsters could clean you out, rather than helping you clean up. So, how can you avoid these natural disaster scams? That’s what we’re going to cover in this post. Before we get into how to avoid fraud, let’s take a look at common natural disaster scams.
Not all disaster fraud is the same. So, you need to watch out for multiple different types of scams. Here are some of the most common:
These scammers will approach you claiming to be contractors who can get to work immediately. If you sign their form, they can work directly with your insurer. Because of this, they claim they can waive insurance deductibles and offer discounted rates.
In reality, these scammers want you to sign an assignment of benefits. This insurance document allows them to collect payments from your insurer. After they get the money, they’ll disappear. All without doing any work.
Along with posing as contractors to get you to sign an assignment of benefits, scammers pose as contractors to get your money. They’ll go door to door offering to do repairs quickly, cheaply, or both. Then, they’ll demand prepayment.
Once they get your money, these fake contractors will take off. You’ll be out the entire cost of a repair – without getting any work done.
Another way fraudsters might target you is by posing as Federal Emergency Management Agency (FEMA) agents. A FEMA home inspection is the first step to getting federal aid for damages.
Scammers use this to their advantage to collect your personal info. They’ll claim they need your social security number, bank account, or other information to process your claim. And, they might even demand payment right then for an inspection.
In reality, FEMA agents will never ask for this information. All they need is a FEMA identification number – which you can easily register for online.
Even if you aren’t hard hit by a natural disaster, you could still be targeted by scams. Fraudsters will set up fake charities claiming to help storm victims. But, the money you donate to these fake charities won’t help anyone. Instead, scammers will keep your donation as a profit.
Along with knowing the common types of scams, you should also know the red flags to watch out for. If you encounter any of these red flags, you might be in danger of getting scammed.
One common red flag is contractors or other service providers demanding prepayment. Before even beginning work, these scammers want you to pay them in full. That way, they can take off without having to do the work.
Another warning sign is pressure to sign a contract. Before they can help you, fraudsters say they need you to sign a contract. But, this contract is likely to be something harmful – like an assignment of benefits.
Similar to pressure to sign a contract, fake contractors may pressure you to sign an assignment of benefits. That way, they can get paid directly from your insurer before taking off.
Scammers may also inflate the number of repairs you need. So, you’ll pay them for work you don’t need. Since those repairs are unneeded, they won’t do much of the work you pay them for.
Claiming to have materials left over, fraudsters will tell you they can do the work much cheaper than others. However, these scammers never intend to do any work. Instead, they’ll take your money and run.
One last way to spot a scammer is by checking their license plates. Many fraudsters travel from out of state to take advantage of the disaster in other states. Since it’s hard to get a license in multiple states, you should be wary of out-of-state service providers.
Now that you know scam types and red flags, here are some steps you can take to avoid becoming a victim of natural disaster fraud.
One way to avoid being scammed is to avoid companies that go door to door. Many reputable contractors won’t go door to door to get customers. This is usually a sales technique reserved for fake contractors, electricians, and other repair people.
Instead, you should look for reputable companies online. Or, get recommendations from friends or family who are happy with the work done.
You should also confirm that people are who they say they are. Scammers will often pose as government workers to get you to trust them.
So, if a FEMA agent or other government employee approaches you, you should ask to see identification. Then, you should call the organization they claim to work for. If they can’t produce an ID or don’t check out with their organization, they’re likely trying to scam you.
Your insurance company is a reliable resource to assess what repairs you actually need. Scammers will often try to upsell you. But, your insurance company will tell you what you need fixed. That way, you can avoid spending unnecessarily.
And, your insurance company can recommend reliable contractors and other repair providers. Using their recommendations is one way to ensure you’re not scammed.
Another way to avoid fraud is to get multiple estimates for any work you need done. High-pressure sales tactics are a favorite of scammers. But, if you’re determined to get multiple estimates, it’s unlikely you’ll fall for their scam.
And, getting multiple estimates can help you get the best price possible.
When you get multiple estimates, you should research each company. Make sure each company has a reputable website and verified positive reviews before deciding to go with one. This reduces the chance that you’ll end up with a fraudster.
To avoid getting scammed, it’s also important to make sure your contractor or other service provider has the right insurance. So, you need to verify that they’re licensed, bonded, and insured. This helps protect you if anything goes wrong while they’re making repairs.
If you want to further protect yourself, you can consider asking to be a named insured while they work on your property. This means you’ll be covered by their policy if something goes wrong. Another option is adding additional limits and coverage. That way, you’re not liable if there’s a problem.
You should only make the final payment when you’re happy with the work. Once you pay the contractor, they have little incentive to correct any problems with their work. So, you’ll be stuck with shoddy repairs. Or, in the case of fraudsters, no repairs.
One last way to avoid fraud and scams is to protect your personal information. Contractors, FEMA agents, and other disaster professionals shouldn’t need your social security number. Or, your banking information. Scammers will use this information to clean out your account, take out loans in your name, and more.
So, if anyone demands your personal information, you shouldn’t give it to them. And, you should look for another contractor or other repair service provider. That way, you avoid getting scammed. Plus, you’ll get reputable repairs done.
After a natural disaster, you have so much to worry about. Making repairs, cleaning up debris, and more can all be costly and time-consuming.
Unfortunately, that’s not all you have to worry about. Natural disasters are a great opportunity for scammers to take advantage of unsuspecting landlords.
But, by knowing the types of scams, red flags to look out for, and steps you can take to avoid fraud, you can stay safe from natural disaster scams.
Another way you can protect yourself if a natural disaster hits is by having the right coverage. As a landlord, you need a policy crafted for your specific needs. Not just an extension of your homeowner’s policy.
If you want insurance designed for you as a landlord, that’s also fast and easy to get, consider Obie. With a speedy and transparent quote, you can be protected in the event of a natural disaster in no time at all.
An umbrella insurance policy can provide the extra amount of liability coverage needed to cover unexpected expenses. It is used to supplement other policies’ liability coverage, including renters’, auto, and home insurance. The umbrella policy will kick in once basic liability coverage is exceeded.
Umbrella policies will cover excess liability costs up to the policy limit. An umbrella policy is typically used when you are sued and found at fault for an accident, such as someone getting injured at your home. Most coverage includes property damage and bodily injury liability claims. The umbrella policy also may cover expenses you are found responsible for such as others’ medical bills or funeral costs; property damage; your legal defense bills; and, if you are a landlord, injuries suffered by a tenant. It also typically covers loss of wages if a person cannot work due to injuries for which you are found liable.
Umbrella insurance policies ensure protection against potential lawsuits. The insurance will protect your assets if you are found liable for property damage or bodily injuries. It also will cover costs for your legal defense if you are not found liable.
An umbrella policy usually does not cover costs for your own injuries or property damage; intentional or criminal acts; or liability relating to agreed-upon contracts.
If you are sued, your current and future assets, such as properties, stocks, bonds, savings, and retirement funds, could be at risk. If you want to mitigate risk and boost the protection of your assets, you should consider an umbrella insurance policy.
Umbrella insurance supplements your standard insurance policies. The coverage protects your assets in many instances when you could be found liable for damages or injuries. Policies can vary, but examples of what might be covered include:
• Your dog bites another dog or person and causes bodily injury;
• Your teenage son or daughter drives, gets into a serious car accident and damages exceed your automobile insurance policy;
• Someone drinks too much alcohol at your house then drives and gets into an accident; or
• Your child’s friend is injured while using your backyard playground equipment.
Landlords might purchase an umbrella insurance policy to protect against the risk that a tenant or guest is injured at their property due to negligence, such as a wobbly handrail. An umbrella policy also may cover issues typical insurance policies do not cover, such as defending yourself and paying damages in cases of slander, libel, or false arrest. Further, an umbrella policy typically will cover liability claims for “pain and suffering,” which is often costly and associated with the psychological ramifications resulting from an incident in which you are found liable.
An umbrella policy can be a relatively low-cost way to shield your assets from unexpected liability expenses and lawsuits. Legal defense costs alone can quickly add up to tens of thousands of dollars. The first $1 million of personal excess liability coverage costs about $150 to $300 per year, according to the Insurance Information Institute. Umbrella liability coverage can be a good way for anyone to protect against claims that put your finances at risk. People with more assets tend to buy umbrella policies more often.
When deciding whether to purchase an umbrella policy, you should also consider your lifestyle and how likely it is that you might be found at fault for someone’s injuries. For example, if you are a landlord, own a dog, hunt, or have a swimming pool, an umbrella policy might be a good investment. An umbrella insurance policy is designed to cover costs and protect your assets if you are sued by a third party and found at fault. It covers a wide variety of claims and can be a reassuring layer of protection to preserve your current and future assets.
Standard homeowners insurance policies may cover damage, liability, and sometimes theft of building supplies for properties under construction. But other types of insurance can be purchased to supplement a typical homeowners policy.
When building or remodeling a property, it is a good idea to close any gaps in a standard homeowners insurance policy by purchasing additional insurance. Parties such as property owners, developers, contractors, lenders, or architects might carry insurance related to a specific construction project.
There are various types of insurance policies that can be purchased to cover properties under construction. These range from protection against theft; coverage for third-party claims of damage tied to the construction project; and coverage to protect materials in transit.
Builder’s risk insurance, also referred to as a course of construction insurance, covers properties under construction or renovation. Contractors, the property owner, or developer often carry builder’s risk insurance policies once a project is underway. This policy provides protection in case of theft or vandalism of tools or construction equipment.
Some policies also cover building materials and equipment being stored off-site. Standard coverage typically includes the cost to repair or replace building materials damaged due to fire, weather, or vandalism. The policy may provide coverage for costs associated with delays in construction due to property damage, such as lost sales or real estate taxes.
A builder’s risk policy can be customized for each project. For instance, coverage can include specific items, such as scaffolding or debris removal and disposal.
Contractors can choose from a variety of business insurance policies to protect them against risks associated with their projects. Among these policies are a general liability policy, workers’ compensation, builder’s risk, and commercial property. A contractor can select the policies that best suit a particular project.
A contractor typically carries a general liability policy. This covers third-party claims such as bodily injury, medical payments, or property damage related to the contractor’s work. Claims related to slander or libel also may be included in the coverage. The insurance also can cover lost, damaged, or stolen tools/equipment/damage done to the equipment being installed inside a home.
Additionally, pollution liability insurance coverage can be purchased to protect contractors found responsible for creating pollution at the construction site. Some states require contractors to show proof of a minimum amount of liability coverage before being assigned a project. Many states also require a contractor to carry worker’s compensation insurance to cover costs associated with employees with job-related injuries or illness. Workers’ compensation covers expenses such as medical bills, lost wages, and legal fees.
Construction insurance is the general term for various insurance policies that provide protection during construction projects.
While contractors typically purchase general liability and worker’s compensation insurance, construction policies can be tailored to fit individual projects. Factors determining the type of policy required include whether an individual or business is purchasing the insurance; the person’s role in the project – such as property owner or contractor; and the type of property being insured. There are a variety of insurance options to protect property owners, developers, and contractors from risks associated with construction projects. The level and details of the coverage will vary by project. Learn more about Building Under Construction insurance and more related topics in our insurance term glossary.
Learn what earthquake insurance coverage includes and what types of plans are typically available. While not every earthquake will harm your home or business, it is a good idea to plan for potential property damage from the sudden shaking of the ground by purchasing earthquake insurance.
Earthquake insurance is typically excluded from standard homeowners and renters policies. It can be purchased as an add-on to homeowners or renters insurance or as a separate policy.
It typically will cover costs up to the same amount as your homeowners’ insurance coverage amount, minus the deductible, which is usually 10 percent to 20 percent of the coverage limit.
Coverage varies by policy, but earthquake insurance usually covers the cost to repair damage to your house and personal belongings inside your home resulting from an earthquake. It also will cover additional living expenses if you need to relocate while the area is evacuated or the home is being repaired.
Note that earthquake coverage usually excludes damage or losses from a flood or tidal wave, even if it results from an earthquake. Policies should be read closely to determine whether additional flood insurance should be purchased. Further, an earthquake policy might not include coverage for structures on your property -- such as a detached garage -- landscaping, or a pool.
Commercial real estate earthquake insurance typically covers damage to your building and business property such as inventory and equipment. It also might cover the loss of income caused by the earthquake.
Coverage will begin when the damage exceeds your policy’s deductible, which is the amount you pay out-of-pocket before insurance pays. Deductibles are determined in part by a property’s age, location, and condition.
Earthquake coverage is not usually part of a general business insurance policy and must be purchased separately. Some building upgrades may be required before earthquake insurance is provided. For instance, a property might need to be bolted to its foundation.
Earthquakes can strike suddenly and cause extensive damage. People in 42 states are at risk of an earthquake occurring, according to the Insurance Information Institute.
Since standard homeowners and business insurance policies do not include earthquake insurance, you should consider purchasing earthquake coverage to protect your assets.
A natural disaster can include events such as a hurricane, tornado, wildfire, flood, ice storm, windstorm, hail, or earthquake.
Make sure to discuss what is covered under your policy with your insurance agent. Insurance coverage for these types of events will vary by policy, but flood and earthquake coverage is generally not covered by a homeowners policy. Also, check to see how high deductibles are and what coverage is excluded from your policy.
Funding from federal and state programs may be available if an earthquake destroys your home or business, but it will depend on the situation and on the program’s eligibility criteria.
Generally, following an earthquake, you should notify your insurer of the property damage. You also should survey your home or business and document the damage. Take photos or videos to secure a visual record for any insurance claims. Your insurance company also might want to send an inspector to note the damage. You also might consider hiring an independent inspector to assess the damage and costs.
Utility companies also should be contacted so they can turn off water, gas, phone, and electricity lines at the property.
Earthquake insurance is not required by law, but you should consider purchasing insurance to protect your assets. Repairing or rebuilding a property damaged by an earthquake likely will be more expensive than purchasing insurance protection.
Earthquake insurance is not covered in standard homeowners or business policies, so it is a good idea to consider purchasing additional insurance to best protect your assets.
Learn more about earthquake insurance policies as well as other important landlord insurance terms in our dedicated insurance glossary.
Large losses following Hurricane Andrew in 1992 and Hurricane Katrina in 2005 spurred many insurers to change how wind and hail coverage is stipulated in homeowners insurance policies. Rather than a standard dollar wind and hail deductible, many policies now make hurricane or wind and hail damage a percentage deductible.
Wind and hail coverage is often part of a standard homeowners policy but may be written as a percentage deductible. Wind and hail coverage also is typically standard in all-peril insurance deductibles.
With a percentage deductible, the insured pays a specified percentage of the total before coverage is triggered. For example, if a home was insured for $400,000 with a 2 percent deductible, the policyholder would pay $8,000 out of pocket before being reimbursed. Other policies might include a flat-rate deductible, such as $1,000 or $2,000.
Wind and hail policies are especially important in areas at high-risk for strong windstorms and hail. This includes Florida, Ohio, and states within the so-called Tornado Alley, such as Texas, Oklahoma, Kansas, Nebraska, Iowa, and South Dakota. Some states make windstorm and hurricane coverage mandatory for property owners. A mortgage lender also may require homeowners to purchase wind and hail insurance.
Some insurers in coastal states or counties where wind and hail storms are more common do not offer wind and hail policies. Homeowners in those locations may be able to purchase coverage through a plan set up by the state.
Wind and hail insurance will cover your home and personal property damaged by major wind events or hail storms. Damage caused by rain entering your home also may be covered if it was due to wind or hail creating an opening in the structure.
The premium paid for wind and hail insurance will depend on the level of risk associated with the property. Factors determining the policy price include location, age, and condition of the property and the amount of coverage needed. Typically, wind and hail deductibles are 1 to 5 percent of the policyholder’s home insurance coverage.
Homeowners should seek a deductible in line with their budget. Coastal areas or areas that typically experience wind and hail likely will have more expensive policies. An insurer might offer policyholders the option to pay a higher premium for a fixed-rate deductible rather than a percentage deductible.
Insurers in areas where wind and hail storms are common might have a hail and wind exclusion. This means cosmetic damage to exterior surfaces such as the roof or windows would not be covered if they still function properly. Consider whether that option is suitable for you or look for a policy that offers more coverage.
Insurance companies will determine what is covered under wind and hail policies. It is a good idea to read policies closely and compare different plans and premiums before choosing the best option for your property and your budget.
Wind and hail policies are an important part of homeowners insurance. Make sure your property is covered and that the standard or percentage deductible is affordable and properly protects your assets.
Learn more about wind and hail policies as well as other important CRE insurance terms in our dedicated insurance glossary.
Property insurance policies typically will stipulate whether your coverage is based on replacement cost value or the actual cash value. Selecting the right amount of coverage can safeguard your property against unexpected events, such as a fire.
Replacement cost insurance is the amount it would cost to rebuild your damaged or destroyed home to its previous design or to purchase new items to replace ones that were damaged or stolen.
The actual cash value covers the amount an item is worth at the time it is lost, including depreciation.
Most homeowners’ insurance policies automatically will insure the property at replacement cost value. It will cover the actual cost to replace items or rebuild your exact or similar home in today’s market. Factors insurers use to determine the value include the age and square footage of the property and renovations made.
Replacement cost value is the more expensive insurance option because it pays for the full amount it would cost to replace the damaged or destroyed items with new ones. Covering 100 percent of a property’s replacement cost will protect you in case of a total loss. Insurance should be recalculated following upgrades or improvements to the house. The replacement cost value also may increase if the cost of labor and materials in the area rise.
Actual cash value is less costly coverage for homeowners’ policies. This coverage pays the cost for damaged or destroyed items as they were at the time they were lost, which is typically less expensive than buying a new item. For example, a three-year-old couch is worth less than a brand new couch.
Some items, such as jewelry, art, or a vintage car, might gain value as they age. These items might need to be insured separately to be certain they are covered for the appropriate amount.
No matter which policy you choose, remember insurance will cover only what it costs to replace a comparable item. Policies will not pay for an upgrade to a pricier option – such as an inexpensive loveseat to a designer sectional sofa.
Replacement cost is the price to rebuild a property using the same materials, the same quality of construction and in the same location. It includes the structure along with fixtures, systems, and finishes.
Some insurers offer policies using functional replacement cost, which means less costly materials that perform the same function as the original structure will be used.
Market value is the price that would be paid for your house in the current market. Land value is included in the market value but is not covered under replacement cost value in a homeowners’ policy.
The market value — which is partly determined by the property’s location, local crime statistics and proximity to good schools — may be less than the cost of materials and labor required to replace a home. If a property is insured to market value, a homeowner might have to pay out-of-pocket for some of the replacement cost.
• Insuring a property for 100 percent of its estimated replacement cost provides the most protection. It will cover all costs to replace or rebuild damaged or destroyed property with a new one.
• Full replacement cost value also will limit the amount a property owner will pay out-of-pocket for expenses.
• Property covered in full will allow you to return to the quality of life you had before your property was damaged or destroyed.
Insurance is a key part of protecting your assets. Considering all your insurance options is the best way to decide which coverage will best fit your budget and needs. Learn more about insurance for landlord and investors, check out our Essential Guide to Landlord Insurance.
The commercial real estate insurance industry is expected to undergo rate hikes in 2020, in part due to a rise in catastrophic events such as floods and fires spurred on by climate change.
Property insurance prices for the fourth quarter 2019 and early 2020 were projected to rise between 10 percent and 20 percent for non-CAT (catastrophic event) insurance accounts and 30 percent to 60 percent on accounts with CAT potential and poor loss history, according to a report by New York-based insurance brokerage and consulting firm USI Insurance Services.
Rates by year-end 2019 were already on an upward slope. Commercial property and casualty (P&C) rates rose by 5.25 percent in the fourth quarter of 2019, according to Dallas-based online insurance exchange MarketScout Corp. Business interruption insurance -- often secured by businesses looking to recover loss of income due to a covered unforeseen event, such as a fire -- also rose 5 percent in the quarter.
Additionally, commercial insurance prices overall jumped 11 percent globally in the same period, according to a report by Marsh’s Global Insurance Market Index, an insurance brokerage and risk adviser.
Offering affordable flood insurance for homeowners in flood zones has been difficult due to climate change causing increased risk. For the past four years, the United States withstood active Atlantic hurricane seasons. Flood insurance is not typically covered under homeowners or commercial property insurance. Policies previously were mainly provided by the National Flood Insurance Program, but private insurance companies in the U.S. in recent years bolstered their presence in the market. Direct flood insurance premiums by private insurers rose 70 percent between 2016 and 2018, to $644 million, according to a report by research and consulting firm Deloitte.
Even with insurers increased presence in the sector, the Federal Emergency Management Agency (FEMA) estimates that only about three percent of U.S. homeowners are covered. More insurers may enter the field, looking to attract the millions of people still lacking flood insurance. Insurers aiming to offer flood insurance should look to meet new federal standards that allow lenders to accept qualified private insurance policies for properties in specified flood hazard areas, Deloitte reported. To do this, insurers will have to have a better system to assess individual risks.
P&C insurers are expected to lift their premium volume by raising rates. This is being done after insurance companies faced growing liability and catastrophe losses. In 2018, the U.S. P&C insurance sector saw net income hit $60 billion, following a 10.8 percent boost in net premiums written and nearly breaking even on underwriting, according to Deloitte. The first half of 2019 was strong as well. Nonlife insurance premiums are projected to grow by about 3 percent in 2020.
A lack of interest in the insurance industry among Millenials combined with retiring baby boomers is expected to leave the industry with 400,000 job openings by year-end 2020, Deloitte research indicates. To keep knowledgeable workers in the industry, baby boomers might be trained on some newer technology being used by insurance companies and offered part-time hours. But insurers also are being encouraged to recruit younger workers by touting the increased use of technology, such as artificial intelligence, being used in the industry and the need for workers with updated skills.
Insurance is a data-heavy industry. Many insurers have taken advantage of new technologies to store data in the cloud. But cloud-service providers also can include features such as core system applications and advanced analytics. Insurers should start planning to migrate more of their business into the cloud to gain additional options toward using advanced technologies, including machine learning and AI, reports Deloitte.
The insurance industry likely will be impacted by claims stemming from business losses due to the coronavirus pandemic. The pandemic is affecting the global economy with many event cancellations and travel restrictions. Much of the impact in the insurance industry will hit trade credit insurers. Trade credit insurance is a type of P&C insurance. It covers the risk that a seller’s customers cannot pay for goods or services bought on credit. Trade credit insurance specialist Atradius last month said it expected corporate insolvencies to grow to 2.4 percent in 2020, up from 1.4 percent in 2019. This is largely due to the coronavirus outbreak, the company reported.
Other types of insurance that may be impacted by coronavirus or other infectious disease-related losses include business interruption insurance. Many businesses had to comply with government-ordered closures amid the outbreak, causing loss of income. Policies typically cover business interruption due to physical loss or damage to property and exclude pandemics. U.S. lawmakers are pressuring insurers to cover claims from businesses that closed due to the pandemic.
Liability insurers also may see more claims from businesses whose infected customers allege they were negligent in protecting against the virus. Coverage for coronavirus-related claims will vary by policy.
Are you protecting your CRE investment? If not, it's time to consider a new insurance plan that will protect you from damage and liability. Check out Obie — a quick and easy way to get a new quote. Start your quote today.
Commercial and residential real estate owners, investors, and tenants typically look to secure property insurance to mitigate their risks should unforeseen events occur, such as weather-related incidents, theft, or vandalism. While residential properties often are insured for loss, damage, and liability, commercial real estate insurance also might cover costs such as loss of inventory and equipment due to a covered unexpected circumstance. Commercial property insurance premiums can vary widely, so looking at what goes into pricing a policy is important.
To see if your commercial property insurance is really costing you, get an updated landlord insurance quote that is easy, fast, and personalized for your property. Just provide a few basic details for your property and see what kinds of rates you should expect!
Insurance premiums take into account factors such as the construction and age of the building, the location and how it is being used.
Construction and age of property: Building materials impact insurance prices, as some materials are more susceptible to damage. For instance, a wood building may sustain more damage from a fire or high winds than a brick building, which could make wood buildings costlier to insure. Older buildings without modernized infrastructure, such as electrical wiring, also might carry a higher insurance price tag.
Location and Safety Equipment: Properties located in urban areas near firehouses and fire hydrants — or which have sprinklers installed within the building — may receive a lower insurance rate.
Other risks associated with the property’s location also are taken into consideration when determining insurance rates. For instance, commercial property in a high-crime or earthquake-prone area could cause insurance rates to be higher.
Further, neighboring properties can influence a commercial property insurance estimate. If the property sits near a business that uses hazardous materials, the risk is higher than the site being insured could sustain damage, causing insurance rates to rise.
Tenant: What the site is used for also impacts the insurance premium. Some businesses are viewed as higher risk than others and insurance companies will charge accordingly. For instance, commercial real estate used for a restaurant is often more costly to insure than a law office due to potential kitchen hazards.
In general, commercial property insurance rates are calculated by determining the value of the building and its contents and multiplying that value by its risk factors. To determine the value of a property, insurance companies typically evaluate either the replacement cost or the actual cash value. The replacement cost is the amount of money needed to replace damaged or destroyed buildings, equipment, and furnishings. The actual cash value is the replacement value of the property less depreciation for age and wear and tear. Actual cash value insurance policies are often less expensive than replacement cost plans, but replacement cost plans provide more compensation.
Commercial property insurance can cover a range of potential risks associated with owning or leasing a property. These include replacement costs or repairs to a property; items within a building, such as furniture and inventory; and signs for the business. It also can include insurance to cover items owned by someone other than the property owner or lessee that are housed at the property.
Commercial property insurance covers many potential losses. But depending on the policy a business chooses, additional insurance may be required to cover incidents such as loss of income if a business is interrupted due to an unexpected event, such as a fire. Commercial property insurance also might not cover areas such as theft by an employee.
There are many variables that determine the cost of commercial property insurance. The average business pays between $1,000 and $3,000 annually per million dollars of coverage, according to HowMuch.net, a financial information website. The average commercial property insurance cost for businesses is $742 per year, according to the website’s research.
The amount of necessary commercial real estate property insurance coverage varies. It depends on what a tenant or owner wants to be covered — plans can be customized for each business. Purchasing insurance can be expensive, deterring some people from purchasing a higher-priced policy. The plan should fit in the budget but also provide the necessary coverage to mitigate risks.
Home-based businesses also should consider purchasing commercial property insurance. The plans can cover costs for equipment and data lost due to unforeseen events that are part of the policy.
Commercial property insurance can provide peace of mind to real estate owners and tenants by reducing the risks associated with unexpected circumstances, such as a fire. Knowing what parts of the business and property are necessary to cover and what insurance companies consider when calculating premium costs should be taken into account before choosing a plan.
When it comes to choosing a plan, let Obie do the work. Answer a few simple questions and you'll get a quote same-day. No paperwork. No hassle. Start your quote today.
In my former life in private equity and real estate, underwriting assets was a key component of my day. Insurance is a fickle mistress and the ebbs and flows of insurance premiums can have a fundamental impact on the performance of your assets as well as the types of debt products that may be available to you when acquiring a new deal or going through refinancing.
What you don’t know can hurt you. Overpricing or underpricing an asset during acquisition are both horrible situations to be in when going hard on a deal. This presumption of accuracy can be dangerous when you are evaluating a big-ticket line item like insurance.
It’s important that, as an owner, you make sure you understand the historical costs of insurance, who your seller is, why the premium is priced the way it is, and who your lender is. These factors are all incredibly important to understand your insurance expense assumptions.
Getting an indication is key to understanding how much you will pay for your premium. It’s easy to take a look at the trailing 12 and assume that you will get the same or a better rate than the previous owner or even if they will give your asset a blanket price per door or price per sqft.
This is why it’s important you understand the previous loan type against the loan you plan to get. For example, a multifamily Freddie Mac or Fannie Mae loan often requires special coverage that you may or may not see with other lenders. These include special types of flood coverage or terrorism insurance which will often drive up your rate.
Things to consider (topics we will discuss in this series in the coming weeks):
Are your proforma year over year growth rates in line with the true historical growth rates of the insurance industry and will that affect your DSCR, Cash on Cash, and IRR?
Carrier risk tolerance changes over time and markets harden and soften with the change in risk. Insurance pricing adjusts accordingly.
Remember: not all policies are created equal. We will cover how to mitigate risks in underwriting insurance costs in your proforma and help to provide some context on pricing.
If you're looking for an instant quote, check out Obie — a quick, seamless process to getting your rental property insurance quote. No paperwork. No hassle. Get your quote today.
CHICAGO, IL – Obie, a cloud-based commercial real estate platform, announces it raised $2.8M in venture capital from investors including Y Combinator, MetaProp, FundersClub, Liquid 2, Soma Capital, JD Ross (Opendoor), Matt MacInnis (Inkling), and Justin Alanis (Rentlytics), among others. The seed round closed in the fall of 2019. The company plans to use the funds to support continued growth, strengthen the feature set on the platform, and build out the staff and infrastructure required to meet the demands of a growing user base.
Additionally, the startup publicly released their free cloud-based insurance and portfolio management platform for small-to-medium size commercial real estate funds and managers.
In an antiquated industry, the Obie platform gives owners a place to consolidate all of the information about their assets and, at the same time, invite and collaborate with any of the key stakeholders like property managers, leasing brokers, or LPs who need access to that data on a daily basis. The result is a dramatic increase in efficiency for their customers.
Obie is 100% free to customers because it uses the underlying data to streamline the sale of products their customers are required to buy anyway, starting with commercial property insurance.
“The silent majority of commercial real estate owners and funds in the US have largely been ignored by advances in technology. I spent countless hours in my previous life on time-consuming tasks that could easily be automated and consolidated in one place,” says Ryan Letzeiser, CEO of Obie, who founded the company with his brother, serial entrepreneur Aaron Letzeiser, after almost a decade working in real estate private equity.
By combining the portfolio management data with the insurance process, Obie has been able to save customers 15% or more on insurance premiums and in many cases, within 72 hours or less—compared to the industry average of 2-3 weeks. When every dollar saved while operating an investment property instantly increases the value of the asset, cutting insurance premiums by 10-15% can sometimes add millions to the value of a portfolio overnight.
"Commercial real estate is plagued with frustrating processes and frequent delays because of how disconnected the parties are. If you bring the people and data together on one platform, you can streamline almost every aspect of owning or acquiring a property." says, JD Ross, Co-Founder of Opendoor and an investor in Obie. "At Opendoor we recognized the power of streamlining residential real estate on a vertically integrated platform. I think Obie can have a similar impact in the commercial market."
In the last year, Obie has seen explosive growth while operating as an invite-only platform:
“When I was a landlord, procuring property and casualty insurance was an inefficient, opaque, and time-consuming process. Obie’s platform brings a refreshing data-driven approach to the process that provides unprecedented speed and efficiency to the process. MetaProp has been looking at this space for a long time, and are very excited to back this talented team”, says Zach Aarons, Co-Founder and General Partner at MetaProp.
Obie is building the next generation commercial real estate platform, consolidating and democratizing technology while connecting the community to intelligent and seamless insurance and portfolio management tools. This is a huge, important part of our economy yet Commercial Real Estate operates in the same way it has for decades — through opaque systems. That’s why Obie is re-engineering the CRE asset lifecycle from the ground up. We’re using technology to make it faster and more efficient, and humans to help make it friendly and enjoyable.
MetaProp is a New York-based venture capital firm focused on the real estate technology (“PropTech”) industry. Founded in 2015, MetaProp’s investment team has invested in 115+ technology companies across the real estate value chain. The firm manages multiple investment funds for both financial and strategic real estate investors representing a pilot- and test-ready sandbox of 15+ billion square feet across every real estate asset type and global market. The firm’s investment activities are complemented by pioneering community leadership including the PropTech Place innovation hub, MetaProp Accelerator at Columbia University programs, global events NYC Real Estate Tech Week and MIPIM PropTech NYC, and publications Global PropTech Confidence Index and PropTech 101.
Commercial real estate (CRE) insurance coverage is a way for investors to mitigate the risk that comes along with owning a property.
Commercial real estate encompasses office, retail, multifamily, and industrial properties. There are many types of commercial real estate insurance to purchase to safeguard these assets. Each type of insurance protects owners for different occurrences, such as fire, explosion, natural disaster, vandalism, and debris removal.
Most real estate investors typically carry at least commercial property insurance and liability insurance. Owners can choose from various policies. Prices vary according to criteria such as the type of property, location, and business conducted there.
Commercial property insurance protects a business from losing assets to issues such as fire, burst pipes, theft, and vandalism. It typically does not automatically cover loss due to a natural disaster including earthquakes, tornadoes, and floods. Coverage can be added for damage due to those circumstances.
With commercial property insurance, real estate investors can protect their property, including its contents and exterior furnishings. Policies can be customized to include varying items and circumstances attached to the claim, such as theft.
Items covered in your insurance policy could include furniture, equipment, computers, and documents. It also will protect outdoor signs, fencing, and landscaping.
Liability insurance covers potential lawsuits from a third party who is injured on or does property damage to your property. The policy can help pay for legal defense and settlements. Liability coverage might be more expensive for property such as apartment buildings or retail space where many people visit. Lower-trafficked properties such as warehouses likely carry more affordable policies. Coverage could include slip and fall incidents to claims of wrongful eviction.
Insurance is available for landlords who lose income due to circumstances such as property repair. It typically does not cover damage due to owner negligence — a repair that was not made that is now causing a larger issue, for example.
Some business income insurance will help pay for the need to temporarily relocate an office property that is being repaired due to damage such as a fire.
Protecting your investment is important. Investors also should consider having risk management procedures in place. This includes keeping accurate records of your property, such as improvements made.
Properly maintaining your property also is key. It should be safe and secure with all fire safety equipment, including sprinklers, fire and carbon monoxide detectors. Doors and windows should be sturdy and lockable.
With many types of commercial real estate insurance available, investors should choose which coverage best suits their needs to help protect their assets. Learn more about landlord insurance or get a quote for your property today.
Investing in commercial real estate carries a certain amount of risk. Risk management is a way to identify and control those risks.
Keeping accurate records is an important part of risk management and there are options, including commercial property management software, which can help organize and manage that information.
Without protecting your assets, there is a risk of having to pay out large sums of money for property damage or injuries that took place on your property.
Risk management starts at the time of investment. Real estate investors cannot know what might happen in the future that would impact an investment. But commercial real estate investors can access data to determine whether a property would fit into its portfolio by looking at detailed property information.
Factors to consider might include location, age, and the quality of a property. The type of asset, such as an office building, retail mall, or warehouse, and predicting the consumer or tenant demand also are considerations. Analyzing the market also is key before making an investment. Fundamental market information such as competition, vacancy and rent rates should be examined.
Investors also should research local, national, and international events and decide whether they might have a long-term effect on the commercial real estate market.
Once acquired, commercial real estate (CRE) professionals must record and maintain many property facts when preparing risk management strategies.
When planning risk management strategies, it is important to keep accurate information about a property. This information could be provided to a property insurance company if necessary. These details should include a history of past claims and renovations made on the property.
Real estate comprises fixed long-term assets but properties sit in an ever-changing dynamic environment. Owners should have a plan in place for all types of potential issues, including natural disasters such as a tornado, flood, or earthquake.
Properties should be up to date with fire-safety tools such as smoke detectors and sprinklers. The property also should be secure and safe, including having adequate lighting and security cameras. Further, keep in mind that property upgrades sometimes can translate to insurance savings.
Real estate owners likely will want to purchase insurance to ensure coverage if something goes wrong. This could include coverage for property, liability, and loss of rental income along with other options, depending on the type of property or business it is.
To handle all of these steps and be prepared for any potential issues, CRE professionals can consider using commercial property management software to help maintain information helpful for risk management.
Some real estate platforms will keep track of valuable data to aid in risk management. These include emergency planning and incident tracking.
Tools also can reduce a property’s exposure to risk by keeping tabs on a building’s safety. By doing this, expenses for insurance and liability protection can be reduced.
Real estate asset management software also can establish and manage risk ledgers, insurance certificates, and incidence reporting. Emergency preparation plans also can be part of commercial property management systems.
Further, some companies offer real estate management software that can be used to keep records and documents in one place so they can be easily accessed when necessary.
Risk management is an important part of real estate investment. Doing due diligence and then properly caring for the property, including keeping it updated with safety and security tools, are just part of the process. Commercial real estate professionals can also use commercial property management software to help organize property information, plan and prepare for any issues that may arise.
As much as you can mitigate risk on your property, you will still need insurance. Check out Obie — a quick, easy way to get your rental insurance quote. No paperwork. No hassle. And you can save up to 25% by switching. Get your quote today.
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