As a savvy Charleston landlord, you must protect your rental property from sudden accidents or disasters by insuring it with the right policy. There are various insurance plans and coverage options available in the market, and it can be overwhelming for you to learn about the best selective few.
Studying the different insurance types to protect your rental property can help you buy the most suitable plan for your investment, and we’re here to make your job easy.
Property insurance is a blanket term used for various insurance policies that offer Charleston property owners either asset protection coverage or liability coverage. It typically covers your property from thefts, vandalism, and weather damages, including the ones caused by fire, wind, hail, snow, or smoke. It also offers liability coverage if anyone other than you or the tenant is injured in the unit, and wishes to sue you.
Dwelling insurance, which is often known as Coverage A, covers the structure of the building itself when it gets damaged by disasters like fire or storm. The costs of rebuilding and repairing the structural losses are also covered under this insurance. The coverage also pays for all the permanently installed fixtures in the unit.
Homeowner’s Insurance in Charleston
A homeowner’s insurance is for the landlords who live in a part of their rental property. It covers destruction and damages to the unit’s interior and exterior. It also covers the loss or theft of the items in the property, any structural damages, and personal liability for harm caused to other people’s properties. Typically, “acts of God,” like natural disasters or “acts of war,” are not covered by homeowners’ policies. There are three levels of coverage under this insurance:
Actual Cash Value
It can cover you for any replacement costs, minus depreciation. So, for instance, if your 6-year-old fridge breaks, you can get the replacement value, but you will receive an amount at which you purchased the fridge six years ago and not today’s value of the refrigerator.
As the name suggests, replacement costs cover you for any repairs or replacement costs at an equal value. It is based on the replacement costs instead of the actual cash value.
Guaranteed Replacement Value
The extended or guaranteed replacement value is beneficial as it pays more than the coverage limit when the construction costs increase. It can go up to 25% of the actual coverage limit.
Landlord’s Insurance in Charleston
We highly recommend investors get landlord’s insurance, as it protects you and your property even when you don’t occupy it. It will cover any property damage, liability protection, and even loss of rental income if the home becomes temporarily uninhabitable. Apart from these basic coverages, you might add coverage for loss of rental income due to missed payments, emergency repairs, sudden construction costs, or damages caused by natural disasters.
Limited Liability Insurance
Liability insurance helps you recover from any financial losses your tenants may cause. For example, suppose a tenant faces any injuries due to lack of maintenance, structural damages, or lack of information that you are supposed to provide. In that case, liability insurance can help you pay the mandatory legal penalties up to the coverage limit.
The Insurance Journal also implies that if you fail to provide security to your tenants or take the necessary actions to prevent illegal activities in the property, among others, your liability insurance has you covered.
Renter’s Insurance in Charleston
When the property gets damaged or destroyed due to accidents, renter’s insurance covers the tenant’s personal belongings placed in the rental unit. It covers the loss of personal property, liability protection, and Additional Living Expenses (ALE). The ALE coverage pays for the tenant’s living expenses in extreme cases. For instance, if the rental home is demolished due to floods, or is under construction, the ALE covers the tenants’ living expenses, hotel bills, or meals until the building is habitable again.
Most of the insurance policies do not cover damages due to natural disasters. Hence, we advise you to get flood insurance and earthquake insurance. Also, consider buying hybrid policies that would compensate for physical losses or damages caused by fire, vandalism, or thefts.
Instead of researching on your own, work with an experienced property management company in Charleston like Meridian Residential Group. We have helped landlords secure the best insurance policies for over 20 years. Meridian Residential Group in North Charleston provides both single-family and multi-family property management in the Charleston, SC area, including in North Charleston, Summerville, Goose Creek, and Moncks Corner, among other cities.
For more information, contact us at Meridian Residential Group.