Investment Property Insurance in New Hampshire
While standard investments have their ups and downs, real estate, especially in New Hampshire, has experienced a boom causing many people to consider getting into real estate as an investment. Though this may be an avenue to consider, it is vital to ensure you have the correct insurance for your investment.
What is Investment Property Insurance?
Real estate can be a profitable asset class, but any property comes with certain risks. Investment property insurance is designed to help New Hampshire property owners protect themselves and their properties from many of the risks that they face.
Investment property insurance can be considered personal or commercial insurance depending on the number of units rented and who owns it (a person or a business.) Either way, it can often be customized to fit the needs of the property and owner. Again, an experienced insurance agent can help determine the best option for your investment property.
Who in New Hampshire Needs an Investment Property Policy?
Individuals and businesses that invest in New Hampshire real estate should have an investment property policy. This broadly includes individuals, sole proprietors, limited liability corporations, partnerships, S and C corporations. It also broadly holds true for residential, multi-unit, commercial, industrial and, undeveloped real estate.
How Can Investors Get Insurance for Multiple Rental Units?
Rental properties are typically insured through landlord property insurance, which is a type of investment property policy. Landlord property insurance policies can be underwritten to cover properties of various sizes and often may provide insurance for multiple rental units.
Landlords who need insurance for multiple rental units would be wise to work closely with one insurance agent who specializes in this type of coverage. An agent familiar with landlord property insurance can help negotiate with an insurance company to help find the proper coverage and pricing. Multiple units can provide discounted pricing with the same agent and carrier. The agent may also identify coverage gaps when all policies are handled together.
Do Homeowners Who Provide Short-Term Rentals Need an Investment Property Policy?
Homeowners who periodically rent out their house on a short-term basis probably don't need a full-fledged investment property policy; however, not all home insurance companies allow short-term rentals. Therefore, you must communicate your rental intentions to your agent before paying guests to stay. An experienced agency, such as HPM Insurance, has several companies that offer various options for such homeowners, depending on the frequency.
What you don't want to do if you rent out your home or other property is not be upfront with your insurance company. The risk is too large considering that the carrier has the right to deny a claim, whether a fire in the home or a slip and fall liability claim by the guest. In addition, if the company would not have written the policy knowing it was rented out, they have the right to deny the claim.
What Do Investment Property Policies Cover?
The coverages within investment property policies can vary, but it is common to find the following coverages available:
- Liability Coverage, may cover accidents occurring on the property for which you are held legally liable
- Dwelling Coverage, may cover one or more buildings on the premises
- Other Structures Coverage, may cover additional structures on the property, not attached to the dwelling (ex: detached garage, shed, barn)
- Personal Property Coverage, may cover the property you own in the investment property (example: refrigerator, stove, furniture, etc.)
- Loss of Income Coverage, cover loss of revenue stemming from a covered claim (fire, smoke damage, etc.)
- Legal Defense, may cover attorney fees and legal expenses if sued for a covered claim
Any personal property coverage afforded by a landlord policy is usually limited to the equipment and other items that the landlord maintains to service the property. These may include a snowblower, lawnmower, appliances and/or furniture (in furnished units). Coverage for tenants’ belonging isn’t included, which is one reason why tenants should get renters insurance policy.
How Much Does Investment Property Insurance Cost?
Premiums for investment property policies are based on several factors, including:
- Location of property (distance from the fire department, hydrants, ocean, etc.)
- Replacement cost of the property
- Type of property (multi-unit, commercial or residential, mixed-use, etc.)
- Revenues of a property
- Past claims history
- Security and safety features
An independent insurance agent who can request quotes from multiple insurance companies can check how much different companies would charge to insure a particular property.
How Can Investors in New Hampshire Get Investment Property Insurance?
For help protecting your investment, contact the independent insurance agents at HPM insurance. Our agents are well-versed in investment property insurance, and we can help you find the best policy for your situation.