Most landlords have one or two properties in their portfolio. For others, investing in real estate is a full-time business where they have several rental units in their property portfolio. So, how do you deal with insurance for your multiple properties?
Perhaps you have more than five units spread across different neighborhoods or cities. Do you have to get landlord insurance for each property? Or can you use a single coverage for all the rental units?
By the end of this article, you will better understand how to insure multiple properties and where to find the best landlord insurance.
Looking to protect yourself and your investments? Get an instant quote from Obie today. No paper applications, week-long waits for quotes, or back and forths with brokers. On average, landlords save 25% with Obie.
Why Real Estate Investors Need Landlord Insurance
Real estate investing involves numerous risks, from theft and vandalism to fire and damages caused by natural disasters. You never know when these will strike. And when and if there is a disaster, woe unto you if you have to pay for all repairs out of pocket.
Having the wrong insurance or coverage or using a homeowners policy for rental property could bring your real estate investing career to a screeching halt.
Those are just some of the many reasons landlord insurance is so critical for rental property owners.
Your homeowner's insurance policy will only work if you still reside in the property. Once you rent your home out, landlord insurance is required. It protects against risks associated with rental properties.
3 Basic Things Typical Landlord Insurance Policies Cover
This covers damages to the property's structure and your contents, like furniture and appliances. The damages could result from accidental fire, vandalism, natural disasters, and irresponsible tenants.
Although most insurance plans provide protection against these damages, not every policy out there offers the actual replacement cost you'd incur. Some provide actual cash value or a predetermined lump sum amount to cover the damages, which might not be enough to replace your property to its initial state using today’s prices.
Loss of income
If a disaster occurs and your property becomes uninhabitable for the residents for an extended period of time, how much rental income would you lose, and could you keep paying the bills? Between the loss of rental income and the costs of getting your property back on its “feet,” reimbursement for the loss of rent revenue could come in handy.
Liability coverage offers protection against legal and medical payments if a third party is injured on your property and you are found liable for the damages. For example, a guest of your tenant could slip and fall and decide to sue you for negligence, or you could unknowingly hire a contractor or handyman who is uninsured.
Additional coverage options
In addition to the three essential covers, landlords can consider adding insurance coverage such as:
Flood insurance for additional protection when rental property is in a designated flood zone.
Builder’s risk insurance if you are a real estate investor who does a lot of renovating or fixing-and-flipping.
General contractor insurance coverage is worth considering if you build a home from the ground up or reposition an existing building into residential rental property.
An umbrella policy offers extra insurance coverage that kicks in when coverage from other policies ends.
Can a Landlord Have One Insurance Policy for Multiple Properties?
If you're a landlord or property manager, you know that insurance is vital for protecting your investment. But what if you have multiple properties? Can you have one insurance policy for all of them? The answer is yes!
There are a few different ways to insure multiple properties under one policy. First, you can add them as scheduled items, which means each property is specifically listed on the policy.
Alternatively, you can add them as an endorsement, which adds coverage for the additional properties without specifically listing them. You can also purchase a blanket policy, which covers multiple properties with one limit of liability.
Regardless of the method used, having an insurance policy for multiple properties helps you:
Manage your coverage easily, since you deal with only one insurance carrier and a single point of contact for the multiple properties you own.
It is also easier to compare different policies from various insurance companies by not having to read through countless pages of legalese.
Multi-property insurance can also save an incredible amount of time. Imagine how hectic it would be to follow up with several insurance companies for quotes for every property. In addition, renewing your policies will no longer be a hassle since you’ll have a single renewal date.
Save money on insurance premiums because most insurers offer a discount if you have multiple coverages.
The exact number of properties you can put under this coverage varies between insurance companies. However, most insurers have this multi-property coverage available for real estate investors with more than four properties as a rule of thumb.
In addition to saving time and money by bundling many properties under one coverage, a multi-property policy will offer the same protection as the landlord insurance for a single property. You will receive protection against damage from fire, covered natural causes, vandalism, loss of income, and liability.
Helpful Hints for Insuring Multiple Properties
As you shop for the best portfolio insurance, there are several factors to keep in mind:
Coverage amount: The amount of coverage you need will depend on the value of your property and the amount of rent you collect. Make sure to get a policy that covers the replacement value of your property, so you can rebuild if necessary.
Additional liability: Consider adding extra liability coverage to your policy. This will protect you if someone is injured on your property and sues you, and the more properties you have, the greater the risk may be.
Deductible: A higher deductible will lower your premiums, but you'll have to pay more out of pocket if something happens. Choose a deductible that you're comfortable with and that won't break the bank if you do have to make a claim.
Management fees: Some insurers might charge you an administration fee every time you have to change your policy.
Adding other people: If you have multiple properties, there is a possibility you have an administrative assistant. In situations like these, it might be a good idea to give them access to the policy. They can always make updates whenever necessary and avoid missing essential deadlines.
By keeping these things in mind, you can choose a landlord insurance policy that will give you the protection you need at a price you can afford.
Where to Find Landlord Insurance for Multiple Properties
If you like the idea of insuring multiple properties under the same carrier, be sure to look for the best landlord insurance. In addition to having the right coverage at the right price, look for a company with excellent customer support and a reputation for a positive claims experience.
There are a few different options to consider when looking for landlord insurance for multiple properties, each with its own set of pros and cons.
One option is to work with an online resource like Obie, which specializes in landlord insurance and can help you compare policies from multiple insurers entirely online. The process is simple and transparent, and there are no paper applications and no lengthy waits.
It can be confusing and time consuming to figure out the exact amount and type of coverage you need for rental property, which is one of the main reasons investors turn to Obie for the property insurance needs. If you own 10 or more properties, contact the Obie private client team and ask for a master policy.
A second method for purchasing landlord insurance is to work directly with a local insurance company that offers coverage for landlords. This can be a good option for people who prefer to shop everything around themselves, but it's crucial to carefully compare rates and coverage options to ensure you're getting the right coverage.
You can also work with a local insurance broker who represents multiple companies. This option allows you to get personalized service and advice, but again it may be difficult to know if you’re getting the right coverage unless the broker is extremely experienced in rental property policies and coverage.
Finally, you could ask your banker if you are financing your real estate properties through mortgages. Bankers work hand-in-hand with insurance companies, while other banking institutions have insurance subsidiaries. Since bankers require mortgage-financed properties to be insured, they will refer you to an institution that will provide coverage for your properties.
Ultimately, the best option for finding landlord insurance will depend on your specific needs and preferences.
When it comes to protecting your investment in rental properties, landlord insurance is a must. And when you have multiple properties, buying coverage from a single insurer can save you time and money. In addition to securing the same protection as a regular landlord policy, multi-property policies offer additional benefits like added flexibility and convenience.
To find the best deal on landlord insurance for multiple properties, be sure to compare rates and coverage options from multiple insurers. And when you’re ready to purchase a policy, working with an online insurance broker like Obie is the simplest and most convenient way to get the coverage you need.