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Welcome to Property Management Brainstorm, the ultimate podcast for property managers, PropTech ventures, and real estate investors! Join industry expert Bob Preston as he brings you the latest trends, best practices, and invaluable guidance in the world of property management. Whether you're just starting or thriving in the business, Property Management Brainstorm is your go-to destination for all things property management. Please click the "more" button in our episodes below to view the episode notes, listen through the website audio player or the video link, and follow along with the whole episode transcript.

Five Minute Friday #3: Insurance Coverage for a Rental Property

By Bob Preston Thursday, November 7, 2019

In this Five Minute Friday, Bob discusses the proper insurance coverage that a landlord should have at their rental property before placing a tenant. With Long-term Rentals (typically unfurnished, rented under a 12-month lease) there are two types of insurance policies that should always be required.

The first type of insurance is a “rental dwelling” policy:

  1. The rental dwelling insurance policy should be a minimum of $1,000,000 public and premises liability insurance. 
  2. Rental dwelling policies usually cost less than homeowner policies because the owners personal belongings are typically moved out of the home and do not need to be covered.
  3. The rental dwelling designation is critical if the house were to become uninhabitable. In such a case, the insurance would pay the property owner’s lost rent during the rebuilding period.
  4. Property managers will require current proof of a rental dwelling insurance policy to be on record in their office and will likely want to be named as additionally insured (this is standard procedure with insurance companies).

The second type of insurance is renter’s insurance, obtained by the tenant, to protect their personal belongings and provide for tenant liability coverage. 

In addition to protecting the tenant’s belongings, renter’s insurance protects the landlord from large scale incidents cause by tenants and would also pay for temporary housing for the tenant if the home is uninhabitable.

There are a few derivatives of these insurance policies which may need to be considered:

  1. If the property is rented furnished. 
  2. If the property is a short-term rental (vacation rental). 
  3. Traditional renter’s insurance is not practical with a short-term rental. 

Links to References Mentioned:

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Bob Preston
President & Broker
Bob Preston is the lead consultant and creator of Property Management Brainstorm, founded to specialize in guidance for teams building property management companies and real estate investment strategies. Bob is a nationally known figure in the property management industry with over 20 years of experience in building and growing property management companies. He was the founder and broker/owner of San Diego's leading and property management company, North County Property Group, before successf...
Bob Preston is the lead consultant and creator of Property Management Brainstorm, founded to specialize in guidance for teams building property management companies and real estate investment strategies. Bob is a nationally known figure in the property management industry with over 20 years of experience in building and growing property management companies. He was the founder and broker/owner of San Diego's leading and property management company, North County Property Group, before successfully negotiating the sale of the business to PURE Property Management in 2022. He then remained with PURE as Western Regional Director, during a period of explosive growth for the company, overseeing operations for 28 branch office locations and over 12,000 doors. More recently, Bob has decided to focus on his consulting business, Property Management Brainstorm, to help others succeed in this dynamic and exciting industry.
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