Owning an investment home or a rental property is an exciting venture. This type of investment contributes to an appreciating net worth and can provide ongoing cash flow in the form of rental income. Unfortunately, however, as an investment owner your rental income is at risk. If your investment home sustains damage and becomes uninhabitable, then, you could lose your rental income. For investors depending on rental income, this could lead to a difficult financial situation.
Therefore, investment owners need to make sure that the insurance policy covering their investment has a “loss of rents” provision that covers potential lost income. Not all loss of rent coverage is the same. Below are a few factors to consider when reviewing the loss of rents coverage for your investment property.
- Named Perils – investment owners need to make sure that they understand the perils covered under the loss of rents provision. In order for your insurance policy to respond for loss of income, the loss must be the result of a named peril in the policy, such as a storm or fire.
- Limits – the loss of rents coverage has a dollar limit associated with how much of a loss can be paid and allocated for loss of income.
- Time Element – this coverage is typically limited to loss of income for a specified amount of time, such as 12 months of lost income.
Our team is ready and available to help you review your current policy and offer suggestions on how to maximize your coverage for potential loss of income as well as other real estate investment insurance provisions.
REI Choice is the bi-product of a seasoned real estate investor and successful insurance executive. The ideation behind the company began in 2017 from a chance introduction and a combination of two unique visions. We are located in Dallas, TX. We are a licensed insurance agency in the State of Texas. We are able to offer these products nationwide via Arcana Insurance Services, LP.
TJAW, INC DBA REI Choice Insurance
519 East Interstate 30
Rockwall, TX 75087
[…] for some period of time following property damage and during repairs. In order to protect this cash flow, real estate investors need loss of rent insurance coverage on each investment […]