Landlord Insurance - handymen, non-licensed contractors

[Will F.]

Hi I was wondering the type of insurance most of you landlords use? Does your insurance cover unlicensed handymen & contractors that are not insured? Do you always get contractors that are bonded & insured?

[Neil Goradia]

We have insurance that covers each property at a certain cash value - i.e. the amount of cash we'd be willing to walk away with if something happened. this is because most of the time the homes we have wouldn't be worth rebuilding because you'd be upside down. Also have a $1-2M liability policy across all units in case you get sued. Try to keep the deductible low ($1k or less) so you can put in a claim when hail damages your roof! Also, get loss of rent coverage, its just a few bucks more per month and allows you to get reimbursed for the months that you can't rent your unit when something happens to the property.

when it comes to handymen, the more you use them the more you will realize which ones are good and which ones aren't. if you have come to know they do good work, it doesn't matter to me whether they are licensed or not....they know what code is just as the licensed people do. that's just me though. if you're looking to flip a house, i'd probably use licensed because there will be an inspection and you don't want to go in again and re-do a bunch of work, plus you can provide proof in case they ask for it.

good luck.