Do I Need Habitational Insurance?
Running a rental business brings its own unique risks and challenges. You're not just responsible for your property, your apartment and condominium complexes, you're also responsible for the people who live in them. Habitational insurance combines elements of home insurance, business insurance with all manner of liability concerns.
Anyone who runs a business in a building where customers and clients can come to visit in the flesh knows that they're going to need liability should anything happen to their visitors. With habitational insurance, even more so than hotels and other homes-away-from-home, you're looking at more long-term risks. Brief exposure to toxic mold, for instance, isn't so dangerous, but leave a moldy spot in a tenant's bathroom for too long and you could be looking at some major health expenses.
A question worth asking: Who needs habitational insurance?
The answer is: Just about anybody who owns a rental property. Of course, the more tenants you're servicing, the more important habitational coverage will be, but even if you're just renting out a single house to a small family, habitational insurance will cover you for risks that are not covered by basic homeowner insurance. A solid habitational policy can also cover risks that you'd be more willing to pay for out-of-pocket for your own home. Vandalism, for instance, may be considerably more expensive to clean up and paint over when you are running an apartment building than when you only have one house to worry about. You can take a bucket of paint and get rid of the graffiti on your own garage door with about a half hour's worth of work. A group of teenagers breaking all the light fixtures in an apartment building, on the other hand, will be a little more expensive.
There are also risks that don't exist at all for homeowners. Loss of rental income, damage to outdoor signs, accounts receivable losses, insurance to cover your association directors and officers in a condominium community and so on.
Habitational policies are there to keep you covered when you need business insurance, and your business is in homes. You are responsible not only for the building where you rent units out to tenants, you are also responsible for tenants and their visitors, as well as any employees you may have helping you maintain your business. If you're renting out so much as a single room to a single tenant, it's not a bad idea to look into a habitational policy.