As an investment property owner, you should also know the most common landlord insurance claims when you lease or rent out a property. As these are the most frequently invoked grounds for landlord insurance claims, they also pertain to the most common causes of damages to rental property. They give an idea of what perils pose the most common risk to property investments.
Whether you opt to pay up front for repairs of damages to your rental property or you pay for insurance premiums, you’re bound to incur expenses either way. It’s best to know more about these perils and risks so you can take measures on how to avoid them. Here are some of the most common causes and grounds in landlord insurance claims. Suggestions on how to minimize or avoid them are also given.
- General Liability
General liability coverage is one of the areas covered by landlord insurance. A general liability claim is triggered when, for instance, a tenant, guest, or visitor gets harmed or suffers an injury on the property being rented or leased. The most frequent incidents that result in a general liability claim are slips, trips, and falls.
If a person slips because of a mound of ice or snow on your property and breaks a few bones, a property owner is very likely to reimburse the hospital and medical expenses. General liability coverage can help defray some of the injured person’s medical expenses and hospital bills.
If you’d like to avoid or at least minimize these kinds of incidents and claims, you should take the time to remove any potential hazards on your property regularly. Some examples of hazards are slippery wet surfaces, large tree trunks or branches obstructing pathways, or rusting handrails and iron bars protruding to common areas or walkways.
- Loss Of Rent
Loss of rental income is among the top grounds invoked or used in landlord insurance claims. Insurance industry observers say that there were years when it covered more than half of landlord insurance claims. This is triggered when you’ve lost tenants or when you’ve been having difficulties getting new tenants.
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You can avoid losing tenants or having unoccupied rental properties by making sure your rentals are always in a good and safe condition. You should check your properties now and then to remove or mitigate the risk of any potential damage.
Other frequent causes of rental loss are economic recessions and financial crises. Unemployment is inevitable during these times, and this may lead to people losing homes or moving to cheaper alternatives.
- Water Damage
Another common ground for claiming landlord insurance is coverage against water damage.
Plumbing is mostly hidden under concrete. The most that you see are joints under sinks and toilet bowls. When there’s faulty plumbing in your property, it can go on leaking under the concrete and you wouldn’t even notice it. You’ll only start to notice it as small mounds or cracks on the concrete slabs. Even when the faucet is closed in the bathroom, drops of water may appear to be escaping between tiles. This can eventually lead to molds or more damage.
Have a plumber inspect your property’s plumbing works periodically to avoid water problems. You also have to include terms and conditions on the tenant’s liability in case the water damage is due to his negligence or recklessness.
- Damage From Hurricanes And Storms
Quite a number of the southern and sunbelt states are vulnerable to hurricanes and storms. Some states, such as Louisiana and Texas, have experienced severe flooding in recent years. Florida has always been hit by hurricanes and storms. Even Ohio and Kentucky have been struck by devastating tornadoes.
These natural calamities and disasters can cause severe damage to properties. While some extreme weather disturbances and strong hurricanes can cause damage that isn’t preventable, there are ways you can minimize them.
You can have your spouts, eaves, and gutters checked before a big hurricane to make sure they’re all good and uncluttered. This can help the free flow of rainwater on your roof and minimize the damage to it. The average cost of putting on new roofing would cost you another USD$18,800. Taking these measures can save you a lot of money.
- Damages Caused By Fire
Other than the common causes of damage invoked in landlord insurance claims, another type of claim is on fire damages.
There are things inside a home that may spark a fire and even raze your rental property to the ground. Some of these are electrical faults and malfunction of home appliances. Candles left burning near combustible or highly flammable materials can also burn down your property. Everything owned by the landlord inside a property will be covered by landlord insurance, but not the personal property of tenants. The building itself should be covered by building insurance separately.
As a rental property owner, know and understand the most common perils and risks to your property. If you can minimize or avoid the risk of damage to your property, that would also lessen the out-of-pocket expenses you have to shell out for the repairs. If you already claimed insurance coverage, that would tend to raise your premiums on renewal because you now have a high-risk profile.