Every rental property owner needs a rental property insurance policy and the latest Fit Small Business article breaks down the details about this particular type of insurance. Atlas partner and co-founder, Ryan Bokyin shares his insight:
1. Know the Replacement Value of Your Property
The insurance company will underwrite the home based on your provided information, including the year the home was built, a visual inspection of quality from the outside, and any upgrades you document, such as granite counters, Jacuzzi tubs, and hardwood floors. Have the details prepared. If you’ve recently had the home built or finished major renovations, provide a copy of the contractors’ work orders and invoicing to show exactly what was done.
“Always try to get a policy that covers the RCV (Replacement Cost Value, aka what it would cost to replace your home today) instead of ACV (Actual Cash Value, aka what your home is worth today after depreciation). The difference is that an ACV policy reduces any claim about how old the property is. While this may not matter very much year two, you can potentially lose tens of thousands of dollars if you have the same coverage year 10.”
– Ryan Boykin, Co-founder, Atlas Real Estate Group