RENTROSPECT MONTHLY NEWSLETTER: ISSUE 6 JULY 2021
INSIDE THIS ISSUE: ARE YOU COVERED? CONTRA COSTA CALLING ALAMEDA AHEAD RENTAL EXPERT EBRHA 360 TRADE EXPO SUPPLIER OFFERS UPCOMING EVENTS
Are You Covered?
As a housing provider, you must ensure your rental property is adequately protected with the proper coverage. The cheapest insurance policy may not be the best to protect your property. Periodically read and review your policy with your broker to understand coverage options. Don't wait until you have a claim to find out you’re not covered. Your rental property is a critical source of income – protect it well! Not sure where to start? Read our quick pointers below to make sure you get the right coverage. Dwelling Fire Policy Get a good DF3 or Dwelling Fire Policy (not an H03 policy) with a Dwelling Coverage that has an extended replacement cost of at least $300 per square foot for rebuilding in the event of a total loss caused by, for instance, fire damage. Loss of Rental Income The insurance carrier pays your lost rental income due to a covered claim like a fire or renter moving out. The limit should be equal to 18 months of rent. Liability Not all policies are the same. Read your policy to expose gaps in coverage based on your current needs. Do you need coverage for bodily injury, personal injury, fair housing, wrongful eviction coverage, etc.? Do not be thrifty here as you will need good coverage to protect yourself from paying out-of-pocket for claims, damages, and legal fees. A minimum coverage of $1M is ideal. Pay attention to details such as the exclusion of illegal acts and house damage due to marijuana growth. Water Backup This covers water backup from drains due to blockage, a very common claim in condominiums.
3664 Grand Ave Ste B | Oakland, CA 94610
Equipment Breakdown and Service Line Coverage This does not count as a penalty and covers mechanical items such as hot water heater, HVAC, sewer lines, electrical panel failure, etc. Short Term Rental Coverage If you own a short-term rental (AirBnB, VRBO, or ADU or In-law unit on your property), you will need special short-term rental coverage. Do not rely on AirBnB’s coverage alone! Condo Rental Your HOA policy does not cover claims inside your unit. You will require a “landlord policy” for condominiums to cover your unit with liability, loss of rents, unit owner’s coverage, and water backup. Umbrella Coverage This would sit on top of your "landlord policy" and is recommended at $1 million in coverage. Talk to your agent about “form following policy,” which only works if your "landlord policy" has the correct underlying liability limits. The cost of umbrella coverage is about $19 per month for $1 Million. Commercial Apartment If you own four rental units or more on one property, you will need a “Commercial” insurance policy. Often, the liability will exclude “personal Injury” or fair housing discrimination claims. For this coverage, certain carriers offer a standalone policy with limits to $1 million and cover HUD charges alleging discrimination. Source: Curt Bulloch, CDI 0I36002, curtbulloch@gmail.com, 925.640.0485. Curt Bulloch is an independent broker with a wealth of risk management experience. He has former experience with Moody’s, Standard & Poor’s, Morningstar, IBM, and Hemscott PLC. Open: 9:00am to 5:00pm Closed: 12:30pm to 1:30pm