How Much Insurance Coverage Should You Purchase?
The higher the insurance coverage, the higher the premiums. You should purchase enough insurance to cover the cost of rebuilding should that become necessary. The rebuilding cost may be higher than the actual value of your rental units and consist of (1) local construction costs, such as exterior wall construction costs and the design cost; (2) the price of your rental units, such as the number of bathrooms and other rooms, the materials used and the type of roof; and (3) attached fixtures, such as garages, fireplaces, or arched windows. However, as a landlord, you do not have to insure the total value of real estate because your land will not burn. The consideration is particularly important when your property is located on a valuable land.
Since the cost of local construction, the price of your rental units, and the price of other property may increase consistently, it’s important to conduct a new value assessment every few years. You may want to seek support from your insurance company on this.
- Should You Purchase Insurance Policies for Your Rentals?
- What Are the Guidelines for Property Inspections?
- What Are the Guidelines for Comparison Shopping?
- How Can You Use Insurance to Protect Yourself From Disasters?
- What Is Insurance Fraud?
- What Is the Legislation in the United States on Insurance Fraud?
- What Is the Coalition Against Insurance Fraud?
- What Are the Key Features of a Successful Landlord’s Policy?
- What Is the Scope of Your Insurance?
- What Is the “Ordinance or Law Coverage”?
- What Are Punitive Damages and Are They Covered by Insurance?
- How Do You Choose and Work With an Insurance Agent?
- How Do You Choose Your Insurance?
- What Are the Benefits of Selecting High Deductibles?