If you are planning to sojourn into the business that involves being a landlord, you want to make sure that you are starting on the right path. Or if you are already one, you might want to assess if your property has the right coverage. No matter which case you belong to, being a landlord is a challenging role that needs to be taken seriously.
Taking shortcuts and skipping valuable procedures can transform your ultimate dream of being a real estate tycoon into monetary distress. Landlord insurance is essential since it maintains your property renting game at its highest peak. You can contact a freestanding insurance specialist to deal with all the work regarding the coverage that you need. They will also research potential policy options and costs that will secure you from unforeseen lawsuits and issues. Here’s everything you should know about landlords insurance and landlord insurance policies.
What is Landlord Insurance?
Landlord liability insurance often referred to simply as liability coverage, is an insurance plan specifically tailored for rental property owners. As its name suggests, landlord liability insurance is not intended to protect primary residences but is intended to be leased out by the homeowners. Landlords insurance is your safety net against any financial damages that you might experience in case a visitor or resident attempt to sue you for particular damages. These damages can come in different forms. It can be a financial problem, emotional offense, physical injury, or even worse, death.
What Does Landlord Insurance Cover?
Landlord insurance is here to safeguard you. It’s readily available to rescue you, in case of legal expenses, as well as expensive medical fees. There are many different types of legal claims and they include anything from falls and slips, theft, property damage, and many others. Due to this, the coverage will shoulder the expenses that come with your legal defense, even if you are guilty or not.
When you are managing a rental property, it goes beyond giving your tenants the key to their rental unit. It is not as simple as it looks. You need to incorporate maintenance and safety measures on the rental property as well as add reliable security systems all over your premises. However, despite this investment to protect your residents and their personal property, there are incidents that can’t be avoided. Here are several examples of situations that you should look out for:
- A resident accidentally falls on a cheap jack sidewalk
- Staircase railing gives up, dispatching a tenant at the ground floor on their back
- A thief manages to sneak in since the locks installed were all bargain-basement
- Black mold is appearing all over the property and guests are suffering from serious medical conditions
- A guest is forced to leave his/her unit without due process
- A resident wasn’t allowed to rent, sues you undergrounds of discrimination
Since liability situations come in many forms, with most of them being unforeseen, the need to get proper coverage is highly recommended. Landlord insurance will protect you from whatever claim your guest or tenant will throw at you by virtue of their renter insurance. Pro tip: make sure you upgrade your coverage by improving your landlord liability policy via an umbrella policy. You can also ask about covered loss and other homeowner’s protection clauses.
What Landlord Insurance Doesn’t Cover
Usually, the landlord insurance policy doesn’t cover personal possessions of your tenants, such as clothes and electronics. Landlords insurance also doesn’t cover run-of-the-mill expenses such as unblocking a sink or lawn mowing services.
Renter’s Insurance vs Liability Insurance
As a landlord, you might want your tenants to invest in a renter’s insurance as a contingency in the lease agreement – though it is not legally required to do so. However, it is a smart move. Landlords insurance will help you guarantee that if something bad happens, it will instantly be addressed. But what really falls under the responsibility of the landlord and the tenants? Actually, this aspect is pretty complicated. Here are several examples:
- Dog Bite – when a guest happens to be bitten by a dog, they can sue the landlord because of medical damages, emotional torment, and many other reasons. However, when the lease agreement states that no dogs are more than 10 pounds are allowed, the responsibility will be transferred to the tenant.
- Fight – if a tenant is attacked by someone that lives in the building, the fault would fall on the person who assaulted the tenant, right? Wrong. If the locks to the main door of the unit are low-quality, the fault would be blamed on the landlord.
Also Read about: Contingent Liability Insurance.
Landlord Insurance: Is it Legally Required?
If you have a loan, maybe. But if you don’t, then it’s not mandatory. There is no law that requires property owners to get this kind of policy. However, the benefits of having such insurance are enough reason to purchase it.
Cost of Landlords Insurance
On average, the cost of landlord insurance is $1,312 per year. The cost of landlord liability insurance depends on many factors, including the following:
- The location of the building
- The construction
- The amenities and facilities
- The kind of business operation
Just like in most cases, it is vital to sit down and talk to your insurance specialist about your situation. This will help them know your property and help you create a policy that is specifically designed to fit your needs.
How to Compare Landlord Liability Insurance Price
With the help of freestanding insurance specialists, you’ll be able to assess which kind of landlord insurance works best for you. They will also compare prices and policies from different insurance providers to guarantee that you and your tenants will be given the appropriate protection.
Other Advantages of Hiring a Freestanding Representative
Insurance policies are tricky and comparing multiple options can be a daunting task. A freestanding insurance representative will help you make the process easier. They will ensure that you obtain the appropriate rental insurance that is tailored to your personal requirements. They will also break down difficult jargon and explain every detail of the insurance in simple and understandable language.
Is Landlord Insurance Worth Having?
You may think that being a landlord is an easy task and that you can earn money by sitting idle. However, it is worth noting that landlords also come across many risks, and you need a well-designed landlord liability insurance package for these needs. Often called liability coverage, you can use this policy when renting a property to someone else.
The insurance will help you deal with situations that may arise due to problems between you and the resident. Here are some examples. Some old infrastructure in your property may cause issues to the tenant, and the tenant may decide to sue you. Some tenants may also sue you when asked to leave without following the prescribed procedure. Landlord liability insurance can help you deal with these scenarios without having to spend thousands of dollars for every dispute.
What is the Difference Between Landlord Insurance and Building Insurance?
Building insurance covers your home from various damages such as floods, fire, storms, and vandalism. While landlord insurance is similar, it also covers issues that are specific for landlords, such as loss of rent and malicious damage caused by tenants.
Why is it Important to Have Landlord Insurance?
Landlord insurance is a good idea because these days, anyone can sue anybody for endless reasons. And once the jury thinks that you could’ve done better to safeguard your guests, you are up for some serious financial distress. And even if the claim is still in your favor, defending yourself in court will also cost you a lot of money. Being a landlord will expose you to different kinds of risks and you should be smart enough to protect yourself against them.
Is the Loss of Rent Covered by Landlord Insurance?
Typically, landlord insurance will cover loss of rental income due to the property being temporarily inhabitable. While some insurance companies include this as a part of the usual landlord insurance policy, others offer it under the name of rent loss insurance.
Do I Have to Pay Liability to Landlord Insurance?
Usually, property owners’ liability insurance is included to your standard landlord insurance policy and will protect you if someone gets injured on your property.
How Much is Landlord Insurance Per Month?
The average landlord insurance premium is around $109 per month.
How Much Renters Insurance Should a Landlord Require?
A landlord should require $100,000 in personal liability coverage, $30,000 in personal property coverage, and $1,000 in medical bills coverage from an average tenant.
Read more: Landlord Insurance in Texas
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