type of Insurance for rental properties

[Steve Kirsch]

Hello BP family. I have 2 questions and need advice please:

1. What kind of policy and how much insurance coverage is needed for a rental property?

2. When investing in out of state properties, is it better to use an insurance agent from that area or can I use an agent that I use in my state of residence?

thank you-

[Leonard L.]

What you're looking for is a "Landlord Policy" which is essentially Fire and Liability insurance which generally has a rider for "lost rents". It will cover a small amount of YOUR personal property - usually only a few $K. As for how much, that is up to you and based on exposure. How much can you risk. If the Neighbor falls in the driveway how much protection do you want? As a standard I go with $1M liability - even if it is umbrella coverage. It's not that expensive and it offers a good safety net. Having lived in HI, if I were investing there higher would be better as it isn't hard to find a $1M house and Lawyers are good at getting over compensated. Just remember Doctor bills and Lawyers are both exensive. The carrier will need to be licensed to sell where the property is. If doing it out of state, a national carrier maybe best for convience. I say start with asking your current agent though, they would be more qualified to suggest coverage limits for the area and can refer you to agents outside if necessary.