What Type of Property Insurance do your Tenants Need?
Insurance can often be confusing. Here’s a snap shot of the different types of insurance that may be helpful for new property managers and residents.
HO-6 Condo Insurance (Owners).
Prior to purchasing an HO-6 insurance policy, analyze the bylaws and declarations of your condominium. From this, you can see the protections lacking and needed. An HO-6 policy is an essential component for the replacement of your personal property, improvements and betterments — and in Maryland paying the first $5,000 of the master insurance policy deductible if an insurable event originates from your unit.
Many condo owners believe that the association’s master policy provides adequate protection. However, the insurance that protects the building does not protect the interior of the individual’s condo unit. A condo owner must know what an HO-6 policy covers and how much coverage is on the building, improvements and betterments and personal property.
HO-4 Renters Insurance (Tenant).
Many renters seem to mistakenly believe that their landlord’s insurance covers their personal belongings. Your landlord’s insurance policy only covers the actual building you live in — not your personal possessions.
Renters insurance HO-4 typically covers items from theft, fire, water damage and over coverage specified in the renters’ policy. The policy also includes liability coverage that protects you against any claims as a result of injury to someone else as well as any property damage that you are legally liable for.
Dwelling Fire Insurance (Landlord)
For those who acquire rental and investment property and do not need to insure personal possessions, the Dwelling Fire Insurance Policy provides the coverage needed. As the unit owner you are responsible for repairing and replacing the unit’s elements as stated int he association’s governing documents. You would also be responsible for paying the first $5,000 of the master policy deductible if an insurable event originates form a unit that you own.
Thanks to Connie Phillips Insurance, Inc., for providing the insight into the insurance world for this article.
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