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For those investing in habitational real estate, it can be an exciting and lucrative opportunity. Having a condo or apartment to oversee can turn into great supplemental income and turn into additional habitational business down the road. By owning rental properties, a side hustle can turn into a full-time endeavor that provides flexibility and accomplishment.
But with this kind of endeavor comes plenty of unique risks, especially if it comes down to overseeing multiple locations. This is why property insurance, specifically offered through habitational insurance carriers, is a smart move to make sure risks are protected against and liabilities are kept to a minimum.
Let’s take a close look at what some of those risks are and how to protect against them.
Copper prices shot up significantly in the 1970s, creating a big issue for property builders who used this kind of wiring. Aluminum replaced copper as the choice wiring, but electrical terminals that weren’t updated in turn created a major fire hazard.
Buildings with aluminum wiring will have to be disclosed to habitational insurance carriers as they’ll likely put in a request that property owners remediate the aluminum wiring to cut out the fire hazard from the start and meet underwriting requirements. Most habitational insurance carriers will allow owners to use switches and converters that will create a safer connection instead of having to rewire an entire property.
In 1968, the Fair Housing Act was established to put down in law that property owners and managers can’t discriminate against or deny potential tenants from rental units based on race, religion, national origin, familial status, age, disability, or gender. Since then, nearly 9,000 discrimination complaints have been filed against property owners and managers, with disability discrimination complaints coming out as the most prominent.
Nearly half of all the complaints submitted every year are tossed out, but many still end up in federal court with average awards of $50,000 given to plaintiffs. But even if a claim is dismissed, just being known as a property owner or property management company with a discrimination complaint on its record could spell trouble when it comes to getting new clients. What’s more, if the case is pursued and the property manager doesn’t end up paying out awards, they are still responsible for court and legal fees.
Cooking accidents can start small then turn out to be major issues, like burning down an entire house. A standard property policy should protect the building owner against any losses due to something like fire. But there can still be additional costs on top of that that are not covered by insurance.
To keep risk low and prevent kitchen fires from breaking out, property owners can use stovetop fire suppression that automatically extinguishes fires via powder if a flame erupts and gets out of control. These are safe systems and inexpensive solutions to reduce the risk of fire damage.
About Mavon Insurance
At Mavon Insurance, we pride ourselves on our unique approach to insurance. We focus on integrity, communication, professionalism, respect, and gratitude to help our clients succeed and place business in specialized markets. For more information about our products or to become an agent, please contact us today at (855) 248-1480.