Do You Need Liability Insurance for Rental Properties? |Jacksonville, FL Rental Properties The right investment can come your way and you can make the decision to make a purchase. A short time after you start earning money an injury or disaster involving your tenant could end up causing you huge financial losses. This scenario happens more often than you think to investors around the country. A liability insurance policy is designed to offer you protection regardless of your business formation. What you do not know about tenant laws and liabilities as a landlord could hurt you. Property Insurance Offers No Liability Protection Property owners and investors are probably familiar with property insurance. These policies are based on several factors including the value of the home, possessions inside and prevention of severe damage. While these policies do an excellent job of protecting valuables and investments, they offer little financial protection to investors that own rental properties. The loss of property is separate from injuries to a tenant or death. The Florida landlord laws are written to protect tenants and open the pathway to lawsuits against investors when liabilities happen. Corporations Can Be Sued for Damages and Injuries Being a corporation has its advantages when it comes to purchasing investment properties. The natural protection of personal assets is one of the advantages. A lawsuit in court against a real estate corporation would provide protection against personal assets of investors, but not against punitive damages when someone is injured or killed in a rented property. Setting up a corporation for real estate is better than being a sole proprietor, but it does not shield corporations from lawsuits brought on by current or former tenants. Liability Insurance Helps Pay for Legal Fees and Damages A big misconception about insurance is that is is broad coverage. The reason why there are so many different policies is because separate protections are needed to close the loopholes in the law. When a lawsuit is filed and presented in court, damages and fees are part of the costs that must be paid during an unfavorable outcome. These fees include attorney fees, witness fees, medical bills, state and local taxes and imposed fines. The fees to hire attorneys for representation in personal injury or civil suits can be expensive. Every good liability insurance policy will provide coverage for damages and attorney fees. Additional Insurance Considerations for Rental Property Investors No policy can be written to provide the exact amount of protection needed for every slip, fall, accident or other occurrence that involves tenants. Judgements and monetary settlements are handed down by judges and state maximum rewards for damages are often surpassed. Investors might consider adding umbrella insurance to protect one or more rental properties after a standard liability insurance policy has been depleted in coverage. There is a lot to consider about insurance and protecting your investments. Protecting your personal and business assets will help you to plan for unfortunate accidents and injuries that could arise from being a real estate property owner. - See more at: jwbrealestatecapital/do-you-need-liability-insurance-when-investing-in-rental-properties/#sthash.0HgaKZX2.dpuf
Posted on: Thu, 30 Jan 2014 18:43:01 +0000
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