Homeowners Insurance or Co-Op Insurance: A Landlord’s Tell-All Guide
A landlord’s ability to obtain and keep tenants will depend on both parties’ ability to keep the property in shape. Even if tenants prove to be responsible overtime, accidents can happen, whether it’s their fault or because of something out of their control. In these cases, it helps to have the right insurance, as this will allow everyone to avoid paying more than they should.
The type of insurance that you provide as a landlord may vary depending on type of property you make available. This guide aims to let you know how homeowners insurance and co-op insurance will affect your ability to recover from any damage.
Who pays for damages will depend on the kind of residence that you offer. You may be in more luck if you provide houses, as this will put responsibility for anything that goes wrong on the shoulders of the property owner. This not only includes anything that breaks inside the house, such as a leak in the pipes or a candle falling over and starting a small fire, but also damages that occur outside. Examples include a friend stopping by and partially parking on the front lawn and destroying the garden, or part of the fence breaking off.
However, you’ll have to be prepared to fork over more bucks if you make co-op apartments and condominiums available to people in the area and those moving in from out of town. Those who occupy this type of home will have to take care of everything in their dwelling, but you’ll own the hallways, common areas, and other spots that are used by people from different rooms. The gardens, parking lots, and other areas outside are also your responsibility.
The chances that you and your tenants will run into any problems or confusion about who pays for what will depend on how clear you make your rules regarding insurance. The digital world allows for people looking for a new home to find the right place quick and easy, and having your own website makes that process an even bigger piece of cake. Your landlord software should have links that are easy to distinguish from each other and fully describe the type of homes you rent and details regarding the application process. This can come in handy for those who have previously lived in a house or co-op and want to stay in a different environment.
Once potential tenants understand your offerings, they will be able to figure out if their insurance will cover them in case of an accident. For example, if you provide houses and apartments in the Garden State and someone has co-op insurance in New Jersey, then they will quickly check out your options in the area, allowing both of you to begin discussing a potential agreement. The better your options are advertised online, the quicker this process will be.
Landlords who provide houses will have to trust their renters to be able to have the money to cover damage through their homeowners insurance, whether it’s from their own doing or a thunderstorm that blows trees and branches onto the roof or fence. However, it doesn’t hurt to go over any specifics for how the renters will treat their new home. They may want to make changes to certain parts of the house, so you should go over what it will cost to make improvements, as well as certain ways you can help. You may also want to change your personal property limits to add extra protection to any possessions that the tenant wants to keep extra safe, such as jewelry or works of art.
If you offer co-ops, then you should stress the importance of getting covered by your master policy in addition to their own policy. In this case, the tenant’s own policy will cover their personal property and any improvements and additions they make to their dwelling, while the master policy may help anywhere that the former doesn’t. Just be sure that both policies interact in a way that allows them to perform to the best of their ability.
Keep this guide in mind so that you and your tenants have the right insurance to create and maintain a good business relationship.