Do You Need Landlord Insurance?
As a property investor. You may own apartments, duplexes, commercial real estate or vacant property, and you enjoy being a land owner. It’s a great feeling knowing that the money will come right to you without you having to do too much work. You wouldn’t want all that time and effort to go to waste, that’s why you need to make sure tat you have the best landlord insurance policy around.
When you become a landlord, standard home and property insurance is no longer enough. If something happens to your property and you never told your insurer that you’ve been renting out your property, they won’t pay for any damages. You need a specialized policy for when renting out your property.
Landlord insurance is important because it protects you from financial loss resulting from accidents, natural disasters, injuries and other liability issues associated with your rental property. It also provides reimbursement for loss of rental income and can cover any repairs or even the entire replacement of a rental property structure.
What Is Landlord Insurance?
Landlords insurance is a policy that protects property owners from financial losses connected to their rental properties. The policy covers your building, with options to insure any contents inside that belong to the landlord. Landlords’ insurance policies typically do not cover any personal property belonging to tenants, or otherwise protect the interest of tenants; although a liability policy protecting a landlord or property manager will be of benefit to tenants should they incur a loss for which the landlord is responsible.
The policy will normally cover standard perils such as fire, lightning, explosion, earthquake, storm, flood, escape of water/oil, subsidence, theft and malicious damage. Each insurance policy is different and may or may not include all these items. Optional coverage might include accidental damage, malicious damage by tenant, terrorism, legal protection, alternative accommodation costs, contents insurance, rent guarantee insurance, and liability insurance.
What Does Landlord Insurance Cover?
- Buildings Insurance – This is the bread and butter of your coverage. It’s what protects the bricks and mortar of your building should there be damage caused by fire, floods or storm. This policy will help pay for the damage and depending on the building policy, may even pay for rebuilding should it be necessary.
- Contents Insurance – After covering the building itself the next thing to do is make sure everything inside is properly covered. This can be done with one simple policy. This policy will protect the sofas, computers, furniture and anything else you own inside the building. Although your tenants will have to insure their own belongings.
- General Liability Insurance – This coverage will cover you in cases where someone gets injured on your property. In this day and age of lawsuit happy lawyers, you need to make sure you’re covered properly in cases where someone slipped and fell on your steps, or on a sidewalk. This coverage will help you pay for settlements or lengthy lawsuits.
- Loss of rent – Should your building get damaged due to a storm or fire, aside from the expenses of rebuilding, you’ll also have to figure out what to do with your tenants who won’t be paying you for a damaged apartment. This coverage is particularly important if you have taken out a large mortgage on the property, and are relying on the rent to meet the monthly payments.
- Legal expenses – This covers the unfortunate reality that not every tenant are the pay on time with a smile type. This will cover your legal costs, including evicting squatters, repossessing your property and any other disputes with tenants, including defending you against any criminal action.
- Landlord home emergency cover – This will cover you in cases of emergency repairs and action that you need to take such as fixing a burst pipe, a pest infestation or a gas leak.
Repair Cost Coverage for Partial Losses. Most losses are partial – which means, the home has sustained some damage due to a covered loss and needs repair. We’ll pay the cost to repair the damage unless that cost exceeds the actual cash value of the property. In those rare cases, we will pay the actual cash value for the loss.
Coverage for Other Structures. The policy protects detached garages and sheds on your property against loss, too – at 10% of the overall dwelling coverage limit. Just like with the home, the loss that caused damage to the other structure must be one of the perils listed on the policy.
- Personal Property Coverage – This optional coverage helps protect the homeowner’s personal property against damage caused by named perils.
- Fire Department Service Charge Coverage – If the fire department needs to come to the home, the homeowner may be billed for the trip they make. Our policy pays for the charge, up to $500.
- Reasonable Repair Coverage – Sometimes, homeowners need to make immediate repairs to the home to guard against additional damage. For instance, you may need to cover your roof if a windstorm blows part of it away. Our policy reimburses policyholders for reasonable repair expenses incurred to protect your home against further damage.
- Vandalism and Malicious Mischief – Optional coverage that protects against this type of damage.
- Personal Liability Coverage – An optional coverage that protects our customers should they be held liable for accidents that happen to other people while they are on the insured property. that are caused by the customer’s own negligence when away from the insured property.
- Premises Liability for Rental Homes – This optional coverage is important for our customers who rent out their homes to others. It protects the customer if they are held liable for accidents that happen to other people while they are on the insured property.
- Burglary coverage – Optional coverage that protects the home and personal belongings for their actual cash value, if someone forced entry into the home. This coverage is not available in all states, ask your agent for details.
Renting out your property isn’t a simple manner and in order to protect you from the risk you need the best coverage possible. But don’t just go for the cheapest deals you can find. Renting out your property to strangers can be a risky business, and you want to be properly covered if something goes wrong.
How Much Does Landlord Insurance Cost?
As with most insurance policies, the rate will depends on the situation. Typically, it will depend on the following factors:
- How many properties do you need to insure?
- Are the properties residential or commercial?
- Where are properties located?
- What type of property are you insuring – for example, is it a duplex or a split level?
- What level of public liability coverage do you need?
- What’s the market value of the property?
- How much would it cost to rebuild the property?
- When was the property built?
- Does the property have any history of subsidence?
An East Insurance Group agent can help you answer these and help make sure your business is covered properly