Loss of rental income coverage vs Rent default insurance

One of the most important insurance coverage options for real estate investors is loss of rental income

But most insurance policies don’t automatically provide rental income loss coverage

When a claim happens and your rental property is no longer safe for your tenant to occupy they must leave

Your tenant is no longer going to pay you rent and when that happens you may no longer be cash positive on the property

At FM Agency Group we help show rental property investors how to use insurance to protect their investments

 

LOSS OF RENTAL INCOME COVERAGE

Landlord rental property owners can purchase this coverage to provide a monthly benefit to you so will not be out of pocket when your tenant will no longer pay rent

This coverage is provided as the result of a claim and not a stand alone loss of rental coverage

When you need to make a claim on your home and your home is no longer habitable the insurance company will provide you loss of rental income based on the time it takes to rebuild your property per the estimate

If there is a kitchen fire and the estimate is for 2 months of repairs you will get loss of rental income for two months in addition to the estimate for damages to rebuild your kitchen

The cost is included in a rental dwelling three DWG-3 policy form and could be as low as $7 a month

Check your rental property insurance policy to see if you have loss of rental income because not all policies include this coverage and it is too important to not have on your policy

 

RENT DEFAULT INSURANCE COVERAGE

This is purchased as a stand alone insurance coverage and does not apply when your property is damaged and no longer habitable

This coverage is based on your tenant no longer occupying your property and breaks the lease

Yes you can just keep the deposit but rent default insurance can pay you up to 4 months of loss of rental income

The cost could run as much as $500 a year and it is based off of the monthly rent

There are many pre-qualification elements that your tenant must meet before the policy can be issued

 

Here are some of the most important rental property insurance coverages you need

  • Loss of Rental Income
  • Lawsuit Protection
  • Sewer back up
  • Service line replacement
  • Equipment Breakdown

Not all policies include all of the these coverage options but if you are interested in one of our insurance proposals for real estate investors just complete the quick for below