Are you a landlord renting property? It could also be that you're renting part of your own home to tenants. Many landlords come to depend on their rental income, and for those with a mortgage on the property, it's even more essential.
If a major disaster happens to your property and your tenants have to move during repairs, will your lost rental income be protected?
There are some policies that will let you assign fair rental value to be covered by a percentage of your home insurance house limit. If the damage is severe and the home needs to be rebuilt, the entire coverage available will be used in the rebuilding process. That means there would be no insurance left to cover the lost rent.
Having rental income insurance would make this process more manageable and less painful financially. If you own a rental property, and rent it out for $2,000 a month, you can purchase $24,000 in rental income insurance to cover a full year of lost rent, if it takes that long to repair or rebuild the home.
Every landlord would be wise to get this type of protection. Some conditions and exclusions are part of all kinds of insurance, so read your policy carefully so you know what you're coverage protects you against. For example:
Policies like this have something called "fair rental value" included in them, which means that if the rent you charge is $2,400, but the going rate for the area is $1,200, you will receive $1,200 each month for your rental income insurance payments.
The coverage you would receive would be for the amount of time to rebuild or repair your home, what professionals consider to be reasonable. If the home is repaired in 6 months time, but you don't find new tenants for a year, you will be covered for the time to rebuild only, not the additional time after that while you search for new tenants.
If you can't afford to replace your rental property or lose the money you make from it, you should consider getting rental income insurance. Homeowners insurance doesn't offer you the coverage you need when renting out your home. Rebuilding or repairing a home is not something that can be done in a day. You need time to find contractors and to obtain building permits and you also depend on weather. Several months will be required to complete the repairs. Sometimes, it is even 6 months or longer to complete. Unfortunately, tenants can't live in your rental anymore and you won't receive any money until the building is done. After all of the time required to complete the repairs, you will have to go through the process of getting new tenants, and all that time without rental income will likely have hurt you a lot financially. Banks are not all that forgiving when you tell them your story about lost rental income, they expect the mortgage payments on time.
If a major disaster happens to your property and your tenants have to move during repairs, will your lost rental income be protected?
There are some policies that will let you assign fair rental value to be covered by a percentage of your home insurance house limit. If the damage is severe and the home needs to be rebuilt, the entire coverage available will be used in the rebuilding process. That means there would be no insurance left to cover the lost rent.
Having rental income insurance would make this process more manageable and less painful financially. If you own a rental property, and rent it out for $2,000 a month, you can purchase $24,000 in rental income insurance to cover a full year of lost rent, if it takes that long to repair or rebuild the home.
Every landlord would be wise to get this type of protection. Some conditions and exclusions are part of all kinds of insurance, so read your policy carefully so you know what you're coverage protects you against. For example:
Policies like this have something called "fair rental value" included in them, which means that if the rent you charge is $2,400, but the going rate for the area is $1,200, you will receive $1,200 each month for your rental income insurance payments.
The coverage you would receive would be for the amount of time to rebuild or repair your home, what professionals consider to be reasonable. If the home is repaired in 6 months time, but you don't find new tenants for a year, you will be covered for the time to rebuild only, not the additional time after that while you search for new tenants.
If you can't afford to replace your rental property or lose the money you make from it, you should consider getting rental income insurance. Homeowners insurance doesn't offer you the coverage you need when renting out your home. Rebuilding or repairing a home is not something that can be done in a day. You need time to find contractors and to obtain building permits and you also depend on weather. Several months will be required to complete the repairs. Sometimes, it is even 6 months or longer to complete. Unfortunately, tenants can't live in your rental anymore and you won't receive any money until the building is done. After all of the time required to complete the repairs, you will have to go through the process of getting new tenants, and all that time without rental income will likely have hurt you a lot financially. Banks are not all that forgiving when you tell them your story about lost rental income, they expect the mortgage payments on time.
About the Author:
Get great savings here: http://www.squareoneinsurance.ca/personal-insurance and www.squareoneinsurance.ca.
No comments:
Post a Comment