Owning an investment property in California that you rent out to tenants is a great way to bring in extra income and strengthen your investment portfolio. As with any home, you'll want to protect your investment with insurance. However, investment property insurance functions a bit differently than traditional homeowner insurance. Let's take a closer look at how it works. 

Liability Coverage 

For starters, you'll need liability coverage to protect you legally and financially if someone is injured while on the property. As the owner, you can be held legally responsible for any injuries, whether you live in the home or not. This coverage can also go towards legal expenses if a visitor or tenant chooses to sue you. While your tenant's renters insurance policy may include liability coverage, it is smart to have your own as well for additional protection. 

Dwelling Coverage 

This coverage component is the same as you'd find in traditional homeowner insurance. It covers the structure of the home and protects against fire, vandalism, burglary and other disasters. In California, earthquakes are relatively common, though most insurance policies don't automatically cover them. You'll need additional coverage to protect against earthquake damage. 

Contents and Systems 

This coverage component marks a key difference between landlord insurance and standard homeowner insurance. If your tenants provide their own furniture, you won't need personal property coverage, as this would be covered under your tenant's renters insurance. You will, however, need coverage for air conditioners, appliances, plumbing and other household components that you own, which is what contents and systems coverage applies to. 

Loss of Rent 

This is another unique component of investment property insurance and is included in most policies. This coverage protects you if you are unable to collect rent on your property due to an event covered by your policy. For example, if a fire destroys some or all of the home, your tenant will have to move out, at least temporarily, so you will be unable to collect any rent payments until a tenant returns. This coverage can help make up the difference until your property is rentable once again. 

Learn More About Investment Property Insurance in California 

If you own an investment property in California, don't delay in giving it the legal and financial protection it needs. Reach out to PolicyNow Insurance Services at 800-422-1251 today to work with us to develop a customized policy to meet the needs of your investment and budget.

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