14 min read
How Long Does a Landlord Have to Collect Unpaid Rent?
It may seem obvious, but collecting rent is one of the most critical aspects of property management. Tenants who fail to pay rent can...
Between the risks of running a business, a volatile and ever-changing real estate market, and the sometimes fickle attitudes of the renting public, property managers have a lot to navigate while protecting their livelihoods.
Luckily, there are some tools property managers can use to safeguard their businesses, including insurance. In this guide, we’ll review some of the most common types of insurance property managers can acquire to make sure they’re protected, including:
Read on to learn everything you ever needed to know about property management insurance.
A property manager’s life doesn’t stop at collecting rent. They’re typically responsible for handling tenant disputes, maintaining the physical condition of the property, and tracking financial data. However, without the proper insurance, one lawsuit or accident can upend a lengthy career or cause irreversible harm to a company.
Before we get into the nitty gritty of property manager insurance, let us explain how TurboTenant’s property management software can help property managers. If you need a powerful tool for:
Advertising properties
Fielding applications
Screening tenants
Collecting rent
Creating lease agreements or
Managing Your Books
Consider TurboTenant.
Our free account can help you get up and running in minutes, and our low-priced Premium offering delivers value you won’t find in high-cost, per-unit property manager software solutions.
Now, let’s get back to the show.
When you consider the extent of the financial liabilities and the risk of unexpected events, it’s easy to see why property management insurance is necessary for property managers and real estate professionals.
The right insurance plan protects against liability claims, professional errors, tenant discrimination allegations, and more, depending on your chosen policy. In short, the right coverage gives property managers the confidence to operate their businesses without the fear that a sudden catastrophe will break the bank.
While it doesn’t happen every day, property managers could face some common lawsuits. Without the proper safeguards, these lawsuits could result in fines, expensive settlements, or a damaged public image.
Some of the common lawsuits property management insurance protects against are:
The above list could be scary for some property managers, but property management insurance could significantly minimize the damage. Depending on the situation, property management insurance acts as a crucial safeguard by helping to cover legal fees, settlements, court costs, medical bills, damage expenses, personal assets, and other liabilities.
Property management insurance can benefit more than just management companies. Because this insurance type encompasses a broad scope, the right policy could benefit investors, real estate agents, brokers, short-term rental hosts, developers, builders, and leasing agents.
Management consultants can play a critical role in helping investors and property owners make smarter and potentially lucrative investment decisions. However, providing strategic advice can bring its own set of risks to the conversation.
Miscalculating or misinterpreting the market, claims of negligence or malfeasance, or legal disputes can lead to costly liabilities all the way up the investment food chain, so management consultants must take proper precautions and utilize property and liability insurance.
Real estate agents juggle multiple responsibilities when working with clients. Buying, selling, and leasing property can be complicated and weighty, with potentially enormous amounts of money on the line.
Property management insurance can, therefore, be a game-changer for real estate agents. It can help with liability coverage for errors and omissions, general liability protection against third-party claims, contract breaches, or other issues that could arise while doing business.
Architects play an essential role in the world of real estate. From designing the structure to overseeing construction and ensuring compliance with building codes and laws, architects can encounter a number of risks and potential liability issues.
Professional liability coverage can protect architects from defect claims, miscalculations, or flaws that lead to structural challenges. In contrast, general liability coverage could protect against claims made during the construction process. While property management insurance may not be the first thing architects think of, it might be worth considering second.
As we’ve seen, there are a number of situations where property management insurance can mean the difference between a long-term business and hanging up a permanent “closed” sign.
In this section, we’ll dive deeper into the specific kinds of coverage property managers might consider.
Property owners’ liability insurance is a kind of business insurance for rental property that applies to a number of use cases, such as:
Where professional property management liability insurance coverage tends towards service-related liability protections, general liability insurance is more geared towards physical and third-party risks that property managers might encounter, including:
Insuring the property itself is incredibly important for the long-term health of investment properties. Property insurance covers things like:
As a business with a physical component, ensuring employees are protected from the everyday risks of their jobs is a key responsibility for property managers. Workers’ compensation insurance typically covers:
One of the most common challenges a property manager faces is tenant disputes. From lease agreement disputes to payment backlogs to potential discrimination claims, covering your bases with the right insurance coverage is critical.
Some of the challenges tenant dispute insurance might protect against include:
Many property managers oversee more than one property, often requiring travel between locations. Typically, however, standard auto insurance does not cover all aspects of business-related travel, necessitating additional commercial auto insurance, which covers:
While the above insurance types offer essential protection for property managers, sometimes coverage limits can exceed what’s required.
In this case, umbrella insurance could provide an extra boost for specialty property managers. Umbrella coverage provides:
As you’ve seen, property management insurance is an essential tool for property managers, no matter how many properties you manage. And as that investment portfolio grows, so does the workload, leaving property managers with a seemingly endless list of tasks that need completing.
TurboTenant is a high-powered property management software that helps property managers and landlords streamline their day-to-day operations.
Property management software has come a long way, and TurboTenant can help you make property management easier at a relatively low cost. With TurboTenant, landlords get access to:
TurboTenant’s robust communication tools facilitate open communication between property managers and tenants, leading to better tenant retention and conflict avoidance. The platform also features mobile apps and automation tools for rent reminders and maintenance requests, which can improve communication with tenants and vendors.
Property managers could benefit from multiple property management insurance coverage packages depending on specific needs and what risks need mitigating. But typically, property managers will focus on:
It’s always a good idea to compare quotes from multiple sources, bundle coverages to save money, and only buy coverage for the risk factors you need. Coverage prices can vary greatly depending on the location of a rental property, so make sure you fully understand the local market when finding the right coverage for you.
While real estate agents might not realize it, property management insurance can be an important decision to protect your business. Between legal claims, property damage, client disputes, and administrative errors, liability can quickly add up for real estate agents. So, identifying proper coverage to keep you safe from unexpected challenges is never a bad idea.
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