Basics

<aside> 💡 Landlord insurance is different from homeowner's insurance. Make sure you are properly covered; your lender will likely require it.

</aside>

Consider getting liability insurance, which is cheaper and easier to set up than an LLC.

Get coverage at replacement cost, not cash (or actual) value. Replacement cost gives you the money replace the item pre-loss condition. Cash value means they’ll depreciate your equipment. For example, this means the insurance company is not giving you the money for a brand new heater, but they’ll pay you a fraction based on the age of your broken one.

Double check that your deductible is high enough; commercial buildings can be worth $10m, so a 5% deductible means you'll need to front $500k.

Finally, consider going through an insurance broker; if you’re bad with too many moving parts like me, they'll make sure you get the lowest rates each year and that you don't forget to cancel it.

Extra protection

Flood Insurance

If you are in a flood plane, then you will be required to have flood insurance.

But if you are in a flood plane AND have a grandfathered rate, it could quadruple your premiums once it gets flooded even once.

Homes in flood area [sell for a bigger discount](http://www.freddiemac.com/research/insight/20200910_unravelling_perceptions_of_flood_risk.page?) on average of 2.3%. That discount increases after flooding events to 5.5%, this includes nice coastal areas.

Liability Insurance

Landlords are strongly encouraged to obtain landlord insurance. This type of insurance covers legal costs and claims resulting from accidental damage, but does not provide protection against intentional damage, contractual liabilities, or criminal prosecution.

Commercial Business Insurance