While most homeowners insurance have coverage for liability, things like somebody twisting an ankle on the ice the homeowner failed to salt and scrape away, thats not adequate for a landlord. Using your example, if all it took was a shyster and crook, you would be out of business anyway if they could take your buildings. The fact remains, if you are much of a landlord, you need a general liability insurance policy. What a landlord dont need is casualty insurance. Landlords dont make claims anyway so why have it? Want to know what happens after the second or third "my tenant flooded the house" claim? Ya, you get dropped. If you are super lucky, you get trippled. $900 a year insurance jumps to $3000. So if a landlord cant claim unless the house burns to the ground, its of limited use. Thats where self insurance pops up.
Say you have 10 rentals, typical small house, not perfect but OK rentals. While you can grab them for 25-35,ooo around here, value them at about $50,000. Insurance on those run about $700 a year... times 10... $7000 a year and the only thing you can use if for is basically a total loss situation, if you use if for more than that, you are looking at about $20,000 a year.
So self insure and pocket the $7000 and hope some moron dont burn one of the shacks down before the 7.14 years it takes to buy a whole new shack. Is it a gamble? Of course. Is it worth the risk? Of course. Its a risk you have to take or you are just sending your insurance agents kids to Harvard while yours have to get jobs at McD's. Like I said though, too many people are conditioned to think they need insurance so they can make someone else pay when a loss occurs.
Seek out a good insurance agent and run things past your accountant, they will be able to tell you when its time to pull the pin and start self insuring.
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Today's Featured Article - Third Brush Generators - by Chris Pratt. While I love straightening sheet metal, cleaning, and painting old tractors, I use every excuse to avoid working on the on the electrics. I find the whole process sheer mystery. I have picked up and attempted to read every auto and farm electrics book with no improvement in the situation. They all seem to start with a chapter entitled "Theory of Electricity". After a few paragraphs I usually close the book and go back to banging out dents. A good friend and I were recently discussing our tractor electrical systems when he stated "I figure it all comes back to applying Ohms Law". At this point
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