Whether you’re running your own investment, or have hired a Seattle property manager to do most of the work for you, you still need insurance. Property owner’s insurance, or insurance for real estate investments, covers property where a homeowner’s policy won’t suffice. While home insurance is not required in the State of Washington, you are still highly recommended to have it.

What is Landlords Insurance?

For those who aren’t sure what landlord’s insurance is, it is a policy designed for landlords and covers everything except the tenants property. Traditionally this coverage includes standard perils but exact coverage does depend on the insurer. For example, some will include earthquake coverage in one policy, while others may not. Your Seattle property manager may be willing to recommend a specific policy for you, especially if they have connections or can get you a deal or reduced rate. However, it is always up to you to insure your property

Do You Need Landlords Insurance?

Chances are that if you rent out any property more than once per year, then yes you do. Any rental that is chiefly a rental and not a home is not covered by a homeowner’s policy. As for the question of ‘do you need insurance’, your property managers will almost definitely say yes. Property insurance protects you in case of most dangers, including those you cannot foresee. If one of your tenants accidentally burns down their unit, then you are covered. Because property insurance can cost as little as $50 per month from some companies, you can see why having insurance might be extremely beneficial in case of the worst.

Choosing Landlord Insurance

Many insurance companies offer programs designed specifically to allow landlord’s to choose the coverage that they need and can afford. Usually these programs start out with very basic insurance coverage and then allow you to add extras such as property theft, coverage for additional structures other than dwellings, earthquake coverage, and even flood coverage. Depending on your property, you may or may not need some of this coverage, so you can choose based on your specific needs.

Usually there are three types of Landlord policies including DP-1, DP-2, and DP-3. DP-1 is the most basic and affordable of policies and covers basic perils while DP-2 is a little more expansive, and DP-3 covers anything that is not specifically excluded from the contract. Usually DP-1 policies only cover the actual cash value of the property, while DP-3 usually offers replacement costs. While the latter is obviously much better coverage, it is also much more expensive for the landlord who isn’t making much to begin with. Usually the size and type of coverage should depend on your rental. For example, a large multi-unit rental that earns the money to cover a better policy should go for it. In fact, most Seattle property managers recommend that you go for a 1 million dollar policy. After all, it’s only slightly more expensive than the $500,000 policy, and covers a great deal more issues including if your tenants decide to sue you after a disaster.

If you want to learn more about landlords insurance, consider talking to your lawyer, or an insurance broker.