Investment Properties
Insurance

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What is Investment Property Insurance?

Real estate investments can provide good returns, but they require substantial investment and are exposed to several risks. From building damage to liability accidents, investment property insurance can help California investors get protection against a range of risks.

Investment property insurance is specialized commercial insurance for real estate investors and landlords. Most of these policies are package policies, which allow them to protect against multiple perils.

Who in California Needs Landlord Property Insurance?

Most real estate investors who own properties in California ought to consider landlord property insurance. This includes investors who have buildings and those who have raw land, for even undeveloped land can pose liability risks. Moreover, insurance policies are able to protect residential, commercial and industrial real estate.

Do Investors Who Participate in a Private Equity Firm Need Landlord Property Policies?

Investors who contribute to real estate investments through a private equity firm generally don’t need their own landlord property policy, for the firm normally is responsible for their properties and carries an insurance policy. 

Any accredited investor might want their own insurance policy in case they’re personally sued, though. A knowledgeable insurance agent can help investors consider their risk exposure and purchase a policy that’s appropriate.

Do Homeowners Who Offer Rent Rooms Need Landlord Property Policies?

Homeowners who rent out one or more rooms in their house generally take on more risk than the average homeowner, and they may need additional insurance to protect against the additional risk. A full-fledged investment property policy typically isn’t necessary, though.

In this situation, a homeowners policy might offer optional coverages that enhance protection. Alternatively, an insurance agent can recommend another policy option that provides the protection these homeowners need.

What Coverages Does Landlord Property Insurance Provide?

As mentioned, landlord property insurance generally offers multiple coverages. Some of the more commonly provided protections include:

Dwelling Coverage:

Usually covers buildings against damage or destruction

Other Structures Coverage:

Usually covers secondary structures (e.g. sheds, fences)

Personal Property Coverage:

Usually covers on-site equipment (e.g. appliances, lawnmowers)

Liability Coverage:

Usually covers basic accidents occurring on a property

Rent Guarantee Coverage:

Usually covers non-payments and late payments

Loss of Income Coverage:

Usually covers other causes of lost revenue

Legal Assistance Coverage:

Usually covers legal costs of non-liability lawsuits

Tenants’ personal belongings and liability risks usually aren’t covered by landlord property insurance. For this reason, it’s often recommended that tenants purchase their own insurance policy (typically a renters or commercial policy).

How Much Do Investment Property Policies Cost?

Premiums for investment property policies vary, as they’re based on a variety of criteria. Some factors that frequently influence premiums are the:

  • Property’s location
  • Property’s zoning
  • Property’s size
  • Number of tenants
  • Annual revenues
  • Landlord’s claims history

Because insurance companies weigh these and other criteria differently, it’s best to compare quotes from different companies when shopping for a policy. 

An independent insurance agent who specializes in investment property policies can help compare quotes. They’ll have the expertise necessary to recommend coverages, and they can check policies from multiple insurance companies. This makes it easy to see different policies that provide the necessary coverages and what those policies’ rates are.

How Can Property Investors in California Get Investment Property Insurance?

For help insuring investment properties located in California, contact the independent insurance agents at Crusberg Decker Financial. Our agents have assisted property owners with many different types of property policies, and we have the expertise necessary to find robust investment property insurance that will protect you and your real estate well. With our assistance, you can be confident in the policy that you select.