PROPERTY INSURANCE: HAZARD, WIND, FLOOD, AND LIABILITY

Appfolio Websites • August 16, 2019

In the same way that homeowners are required to buy homeowner’s insurance, it’s important that landlords have a landlord insurance policy in place when they’re renting out a home to tenants. Most people don’t realize that nearly 30 percent of residential homes are rental properties. Those properties need a comprehensive insurance policy that covers losses due to fires, break-ins, and severe weather incidents that leave a home uninhabitable for reasons beyond your control.

Homeowner’s Policies versus Landlord Policies

Like homeowner’s insurance, landlord insurance provides coverage for the home itself and other structures on the premises. While both types of insurance are similar, there are a few key differences. For example, homeowner’s insurance policies typically cover the personal property of an owner who lives there, such as furniture, clothing, and computers. However, a landlord insurance policy only covers the structure and its systems.

Since landlord insurance does not cover personal property owned by tenants, we always recommend that tenants carry renter’s insurance. You can require that your tenants buy a renter’s insurance policy, which will not only protect their personal belongings, but also take care of any liability that falls to them when the property is damaged or a guest is injured.

If you’re renting out a property that you once lived in yourself, make sure you convert from a homeowner’s policy to a landlord policy. If you don’t, it’s possible a claim might get denied. Talk to your insurance agent to make sure all of your new requirements as a landlord are met.

Liability and Landlord Insurance

An important part of your insurance policy is your liability protection. If a stairway falls to pieces and a tenant is injured or your tenant’s dog bites a child who lives next door, you may face a lawsuit. When you are sued or a claim is filed against you, the insurance company will defend you against any liability. They’ll also pay any damages that are awarded to the complaining party.

Make sure your policy anticipates all of the potential liability and risk that comes with renting out a property. You cannot be too careful. If you’re working with a property management company, you’ll have an extra layer of coverage. You should also include your property manager as an additional insured so that a unified defense can be in place in the event that there is a lawsuit or a claim against you.

Additional Landlord Insurance Inclusions

We recommend you ensure that your policy includes a loss of rent coverage. If something terrible happens and your tenants are no longer able to live in your home because it’s uninhabitable, you’ll lose rental income but you’ll still have financial obligations that need to be met. Loss of rent coverage will ensure you don’t lose any money while your tenants are displaced and repairs are made.

You can choose additional protections when you’re buying insurance. Flood insurance is an important thing to include in Florida, and many landlords are now buying insurance policies against bed bugs. Talk to your property manager and your insurance agent about what’s really necessary.

Choosing the right landlord insurance policy can be overwhelming, but it’s not a decision to be taken lightly. We can help you with your insurance needs or any of your property management questions. Please contact us at Florida Property Management Services.

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September Newsletter - Cost Segregation

By Florida PMServices • September 11, 2026

What is it? A cost segregation study looks at the different parts of a rental property to see which ones can be depreciated faster. This can allow investors to take some deductions sooner instead of spreading them out over the standard 27.5 years. Who uses it? It’s mainly used by real estate investors and property owners who want to claim larger depreciation deductions sooner on their rental properties. A qualified tax professional or cost segregation specialist typically performs the study. Where does it apply? Cost segregation can be used on residential rental properties, including single-family rentals, although whether it makes financial sense depends on the property and the investor's tax situation. The IRS specifically provides guidance for cost segregation studies involving residential rental property. When should investors consider it? It is often considered when purchasing, constructing, or making significant improvements to a rental property. Investors can also look at existing properties, but the potential benefit depends on the property's cost, improvements, and tax circumstances. Why does it matter? The goal is to potentially move some depreciation deductions into earlier years, which can reduce taxable income sooner and potentially improve near-term cash flow. It doesn't create new value in the property, it changes when certain costs may be deducted for tax purposes. Investor Takeaway: A cost segregation study can be worth exploring for investors with higher-value rental properties or significant improvements, but the potential tax benefit varies from property to property. It is recommended to always work with a qualified tax professional to determine whether a study makes sense for your situation.

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By Florida PMServices • August 21, 2026

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