At a minimum, rental properties should have three coverages:
• General Liability Coverage
• Building Coverage
• Loss of Rents / Business Income Coverage
General Liability Coverage – covers against lawsuits claiming you are responsible for Bodily Injury and/or Property Damage.
Bodily Injury – i.e. a slip and fall by a tenant or other person on your property.
Property Damage – i.e. a fire at your property damages neighboring properties you
do not own.
Building Coverage – this mitigates and restores the building from covered losses and this coverage is required by lenders to secure loans.
Building Coverage – i.e. fire, wind, water, vehicle impacts and other elements of structural damage.
Loss of Rents/ Business Income Coverage – pays for loss of rental income when a building that is rented to others is damaged by a covered loss.
Other items to consider:
1) Ideally have Replacement Cost, not Actual Cash Value (ACV). However, ACV may be the only option on older properties.
2) Special Form, if they do not offer that, then Broad Form. If they only offer Basic Coverage, be aware water and theft claims are excluded.
This is not a complete list, but are the most impactful coverages following a claim.