What to Know about Essential Palm Springs Landlord Insurance Policies
The policy you buy for your rental properties will cover your physical investment property and the liability that you take on as a landlord. This is different from a homeowner’s policy. It’s separate from your tenant’s renter’s insurance policy. Here are the three main things that nearly every Palm Springs landlord insurance policy will cover: 1.Dwellings and structures. Your rental property as a building is protected against perils such as fire, wind, hail, or structural collapse. Whether it’s a single-family home or a small apartment building with five or six rental units, your dwelling coverage covers exactly that - the dwelling. Any of the property inside the rental home that belongs to you will also be covered, such as appliances. 2.Loss of rent. If there’s an unexpected event or a covered claim and your tenants need to move out during the repair process, you won’t be earning any rent. A loss of rent insurance policy will cover the lost rental income. If your existing policy does not include this, make sure you buy extra coverage so you have it. 3.Liability. Liability protection is essential, as renting out a property is pretty risky. If you are liable for property damage or bodily injury to your tenants, your insurance policy will cover those costs. Medical bills will be covered as well as any lost wages in some circumstances, depending on the policy you buy. Your insurance does not cover tenant possessions. You should require a separate renter’s insurance policy. Your policy also won’t cover floods or earthquakes.Earthquake Insurance for Palm Springs Rental Homes
Earthquake damage is outside of the normal insurance coverage you buy as a landlord. This is a problem for Palm Springs real estate investors because we’re located in an area that hasn’t seen a terrible earthquake for a while, but is always at risk for one. That’s why we recommend earthquake insurance. Ironically, California law does not require earthquake insurance. You should still invest in it. If the big one hits, you’ll be glad you have the coverage. If you own a building with several units, you’ll be looking at a lot of damage to a lot of separate income streams. Even a minor earthquake can cause some damage, and if we’re unlucky enough to have a major quake, you’ll likely have to move your residents out while you make the necessary repairs.Flood Insurance in California
If you’re like most Palm Springs investors, you likely never thought of your property as needing flood insurance. After all, flooding is hardly a risk when you own investment property in the desert. And then, Tropical Storm Hilary arrived in August of 2023, and everyone who lives in and around southern California began to question whether flood insurance wasn’t a valuable tool to have in their insurance toolbox. Your property insurance will cover damage that’s caused by an internal and immediate flood (a leaky pipe or a sewer backup), but flood damage due to tropical rains or an El Nino event are not covered by your general policy. Palm Springs is not actually immune from the threat of floods, so consider this extra insurance. You have a couple of options when deciding where to buy flood insurance anywhere in California. One option is to go through the National Flood Insurance Program (NFIP), and another option is to look for plans available through private insurers. The amount you spend on this type of insurance depends on a number of things, including whether your property is located in a floodplain and what kind of risk is posed by potential rising waters. Talk to a smart insurance agent and take your time looking around at different policies.Renter’s Insurance is Essential Coverage
You get the idea of why insurance is so important, and what your own property needs. Now, let’s talk about what your tenants need.
Renter’s insurance was once very niche, but it has become increasingly common over the last few years, and one reason for that is because tenants’ possessions have grown in value.
As Palm Springs property managers, we recommend that you require renter’s insurance from your residents. Your lease agreement should require proof of insurance before they move into your rental property and when the lease renews. This provides an important extra layer of protection for you, your residents, and your property.
The good news is that this shouldn’t be a hard sell when you’re talking to potential tenants. Renter’s insurance policies are often inexpensive, and your tenants can sometimes bundle this type of insurance with their auto policy.
Educate your tenants, if necessary. They need to understand that your insurance won’t cover them if their electronics are damaged in a flood or if their clothing is stolen in a burglary. Not only does the insurance cover their personal possessions in case of loss, it also covers your resident’s own liability should anything go wrong at the property.
Let’s talk about how we can prioritize protecting your investment and how insurance helps us do that. Please contact us at Xepco Properties.
