As an owner of an investment property, you should also be aware of the most common homeowner’s insurance claims when renting or renting a property. As these are the most common grounds for homeowner insurance claims, they also relate to the most common causes of rental property damage. They give an idea of the dangers that represent the most common risk for real estate investments.
Whether you choose to prepay for repairs to damage to your rental property or pay the insurance premiums, you are required to incur expenses anyway. It is best to know more about these dangers and risks so that you can take steps to avoid them. Here are some of the most common causes and reasons for homeowners insurance claims. Suggestions on how to minimize or avoid them are also given.
- General civil liability
General liability is one of the areas covered by homeowner’s insurance. A general liability claim is triggered when, for example, a tenant, guest or visitor is injured or sustains an injury on the rented or leased property. The most frequent incidents giving rise to a general liability claim are slips, trips and falls.
If someone slips because of a mound of ice or snow on your property and breaks a few bones, a homeowner is very likely to reimburse hospital and medical expenses. General liability coverage can help cover some of the injured person’s medical and hospital costs.
If you want to avoid or at least minimize these kinds of incidents and claims, you must take the time to regularly eliminate any potential danger on your property. Some examples of hazards are wet slippery surfaces, large tree trunks or branches obstructing pathways, or rusty railings and iron bars protruding from common areas or walkways.
- Loss Of Rent
Loss of rental income is one of the main reasons given or used in homeowners insurance claims. Insurance industry watchers say there were years when it covered more than half of homeowners’ insurance claims. This is triggered when you have lost tenants or when you are having difficulty finding new tenants.
You can avoid losing tenants or having rental units unoccupied by making sure your rentals are always in good condition and safe. You should check your properties from time to time to eliminate or mitigate the risk of any potential damage.
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Economic recessions and financial crises are other common causes of rental losses. Unemployment is inevitable during these times, and this can lead to loss of housing or migration to cheaper alternatives.
- Water damage
Another common reason for claiming homeowners insurance is water damage coverage.
The plumbing is mostly hidden under the concrete. Most often, these are the gaskets under sinks and toilet bowls. When there is faulty plumbing in your property, it can continue to leak under the concrete and you won’t even notice it. You will only start to notice it in the form of small mounds or cracks on the concrete slabs. Even when the faucet is turned off in the bathroom, drops of water may appear to escape between the tiles. This can eventually lead to mold or further damage.
Have a plumber periodically inspect the plumbing work on your property to avoid water problems. You should also include terms and conditions on the tenant’s liability in the event the water damage is due to their negligence or recklessness.
- Damage from hurricanes and storms
A number of southern and sunbelt states are vulnerable to hurricanes and storms. Some states, such as Louisiana and Texas, have experienced severe flooding in recent years. Florida has always been hit by hurricanes and storms. Even Ohio and Kentucky have been hit by devastating tornadoes.
These calamities and natural disasters can cause serious damage to properties. While some extreme weather disturbances and powerful hurricanes can cause damage that is not preventable, there are ways to minimize it.
You can have your spouts, gutters, and gutters checked before a big hurricane to make sure they’re all good and clear. This can help the rainwater flow freely on your roof and minimize damage to it. The average cost of installing a new roof would cost you an additional $ 18,800. Taking these steps can save you a lot of money.
- Fire damage
In addition to the common causes of damage cited in homeowners insurance claims, another type of claim relates to fire damage.
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There are things inside a house that can start a fire and even destroy your rental property. Some of them are electrical failures and malfunctions of household appliances. Candles left burning near combustible or highly flammable materials can also burn your property. Anything that is owned by the owner inside a property will be covered by the owner’s insurance, but not the personal belongings of the tenants. The building itself must be covered separately by building insurance.
As a rental property owner, know and understand the most common perils and risks to your property. If you can minimize or avoid the risk of damage to your property, it would also reduce the personal expenses you have to pay for repairs. If you have ever applied for insurance coverage, it would tend to increase your premiums upon renewal as you now have a high risk profile.