Building a Secure Investment: A Guide to Property Insurance for Southwest Washington Landlords

As a landlord, one of your top priorities must be protecting your rental property. Whether it's a single-family home that you’re renting out or a collection of units in a multi-unit building, your rental property is a valuable asset that requires proper insurance coverage. Not having proper insurance coverage can lead to unexpected expenses and financial loss.

There are a lot of steps to building a secure investment. You have to choose the right property. You need to understand the market and its rental values. A good grasp of the competition is also helpful in securing your success as a real estate investor. 

None of that matters, however, if you’re not protecting your property. Protecting your property requires good tenant screening, a proactive and preventative maintenance plan, and a willingness to conduct inspections and consistently document the condition of your property. 

Before you do all that, you have to insure your property. Our experience as property managers in Vancouver and throughout Southwest Washington has given us a unique perspective on how to choose the right property insurance. We’re not insurance agents, but we can tell you what to look for and what not to forget when you’re insuring your investment.

Choosing a Comprehensive Insurance Policy for Your Investment Property

The first step to securing your investment property is to understand your insurance options and what kind of policies provide coverage. This insurance policy will be different from your homeowners insurance, which only covers you and your property when you’re occupying it. As a landlord, you’ll need a different policy that covers your structure, your own appliances and systems, and any liability that comes with renting out the home. There are several parts of a comprehensive property insurance policy, and you want to make sure you have all the coverage you need.

Here are the most important elements:

• Standard Property Insurance. This part of your insurance policy covers damage to your property caused by fire, theft, vandalism, or natural disasters. If a pipe bursts and causes water damage to your property, this will cover the repairs. If a tree falls through your roof during a windstorm, your property insurance will pay to repair the roof and any other parts of the property that were damaged in the event. 
• Liability Insurance. Liability insurance is extremely important for landlords in Southwest Washington. Renting out a property to tenants is risky. This part of your policy protects you from any legal or financial responsibility that may arise if a tenant or visitor is injured on your property. If a tenant falls down the stairs or one of their guests is injured walking from the driveway to the home, you might find yourself in the middle of a lawsuit. Your liability insurance will kick in to defend you in such an event. 
• Loss of Rent Insurance. Always make sure you choose a landlord insurance policy that provides loss of rent insurance. Many of them do, but in some cases you might find you have to buy the extra insurance to ensure you’re covered. You need this insurance because unpredictable things can happen. If your tenant needs to move out after a covered loss to allow for extensive repairs, you won’t have any rent coming in from your tenant for that period. This insurance will ensure you’re not left unable to pay your own mortgage or meet your financial obligations. 

You might also want to consider umbrella insurance while shopping for protection, especially if you own several rental properties. This type of policy provides extra coverage beyond the limits of your standard insurance policy. Many real estate investors find it worth the added expense, which is not cost prohibitive.

Assess the Value of Your Property

Before purchasing any insurance policy for your investment property, it's essential to assess the value of your property. This will impact what you’ll need in terms of coverage and how much your premium will be. The value of your property can be determined by using real estate appraisals, property assessments, and market analyses.

Keep up with changing property values. Your rental property is likely worth more than it was even two or three years ago. Make sure your insurance policy reflects an accurate property value. You don’t want to be left with less than you need if something happens that you have to rebuild completely. Significant upgrades and changes that you might make to your property will also affect value and insurance needs. 

Review your property regularly and make sure you’re working with an agent who can advise you about what’s best for your specific needs. 

Renters Insurance for Southwest Washington Rental Homes

We always recommend that rental property owners require renters insurance from their tenants. This is a big part of protecting your investment and keeping it financially secure now and in the future. The insurance policy that you have will not cover the personal possessions or property of your tenant. That policy only covers your property, such as appliances. If tenants want to protect their furniture, electronics, clothing, and valuables, they’ll need their own insurance. 

A renters insurance policy will also protect your tenants against any of their own liability. If they leave the stove on and cause a kitchen fire or they flood the bathroom by forgetting that the tub is running, their policy will cover any damage that they’ve caused. This will save them money on the out-of-pocket costs for which they would be responsible without the insurance. 

Renters insurance is pretty common, and your tenants should not object to having it. This insurance is relatively inexpensive, and you should ask to see proof of it before you sign or renew a lease agreement. 

As a landlord, purchasing the right insurance policy is an essential part of protecting your investment property. By understanding your insurance needs, assessing the value of your property, working with a reputable insurance provider, and reviewing your policy regularly, you can ensure you and your tenants have adequate coverage. Investing in quality property insurance will allow you to enjoy peace of mind and protect your investment for years to come.