With the average Brooklyn rental going for $3,500/month this past October, having real estate you can rent out is a great way to build wealth. And if you look at the local market, it’s prime time for adding new properties to your portfolio. But what if you don’t have the right insurance and disaster strikes? Your source of wealth can quickly become a drain on your finances.
Rental property insurance gives you peace of mind that your property will continue to be profitable no matter what happens. But that peace of mind is a fleeting dream if you don’t have the right coverage to protect your interests. Let’s talk about the different kinds of insurance your Brooklyn properties need.
Property Insurance
Your property is your greatest asset. That’s why protecting it should be a top priority, especially when people are paying you to let them use it. Property insurance is not just for covering damages to your rental property. It can also provide you with the funds to help replace and rebuild the unit in the event of a total loss.
Let’s say a storm blows a branch off a tree and into your roof. Or a tenant breaks a window while playing catch too close to the house. Property insurance will cover the costs of replacing your roof or the window.
If your roof is damaged by a storm, you might have water damage caused by rain soaking through the hole in your roof. That can damage the interior of your building, as well as property inside your home or office. Property insurance can cover the costs of repairing the inside of your building. It can also pay to replace damaged property or equipment inside the building.
Learn more about Landlord / Building Owner Insurance.
General Liability Insurance
Regardless of the precautions taken by you and your tenants, accidents happen. If someone gets injured as a result of neglect or poor maintenance while in your rental property, you’ll have to pay their medical expenses. That holds true whether it’s your tenant or one of their guests.
Since medical bills in New York add up quickly, even a minor accident has the potential to bankrupt you. With general liability insurance, the insurance company can pay those medical bills. That frees you up to focus on making repairs or improvements to the building so you can get your next tenant.
Learn more about General Liability Insurance.
Loss of Rents
Look, no one wants to stay in a house with a hole in the roof. That means you won’t be able to rent out your property to anyone until your house is repaired. As if the cost of those repairs weren’t bad enough, you’ll also have to miss out on collecting any rent during that time.
If you have the right insurance, you can essentially collect rent — or at least part of it — from your insurance company. That can help you pay the bills until your rental property is as good as new!
Personal Property Insurance
Property insurance can cover the cost of replacing property belonging to the business. For example, any kitchen equipment you provide, such as a stove or dishwasher, could be covered by property insurance.
For example, let’s say you own a vacation home that you rent out. You might keep some of your personal possessions locked in the attic or basement of the house. If any of that property suffers fire or water damage, personal property insurance can cover the cost of replacing it.
Other Structures Insurance
This type of rental property insurance covers structures that are not connected to your rental property. That includes garages, pools, sheds, and driveways, just to name a few. They may or may not be used by your tenants, but they still run the risk of costing you a pretty penny if they get damaged.
They could be damaged by your tenants misusing them or when Mother Nature gets cranky. Either way, you’ll need insurance to cover repairs on all those other structures on your rental property.
Workers’ Compensation Insurance
You don’t have to worry about this type of insurance if you’re the only one maintaining your property. But if you hire anyone to maintain the property for you, you have an employee. That means you need workers’ compensation insurance.
This holds true if they’re a volunteer who checks in on your property once in a while. You’ll still be responsible for paying their medical bills if they get sick or injured while on the job. Workers’ compensation insurance can pay those medical bills for you. That way you — and your employee — don’t have to worry about a thing.
Learn more about Workers Comp Insurance.
Ensure Your Assets Are Covered With Lincoln Brokerage
It’s important to make sure you have the right insurance to cover all your assets for your rental property. At the same time, there are a lot of different types of insurance you can buy to protect your other interests. There are a lot of factors that go into determining which type and how much insurance you need. But don’t worry if you find it all confusing. At Lincoln Brokerage, we’ve got your back.
We’ll guide you through each option and help to make sure you have all your bases covered and that you know what you’re paying for.
We’ve been helping neighborhood businesses like yours for decades — since 1932. We understand the unique needs and challenges New York businesses face.
All you have to do to find the right coverage is reach out to start the conversation.