Landlord Insurance

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Landlord Insurance Policy

Landlord insurance policies are simply a home insurance policy with additional protection for landlords. If you own a rental property be sure to have the proper protection or you could be in for a big surprise when something happens to your rental.

What is covered on a landlord insurance policy?

Depending on the type of property you own the coverage can vary, for example if you own a condo that is rented out usually the homeowners association will cover the exterior of that property. If you own a single family home the insurance would cover the entire dwelling. Without getting into detail about home insurance policies we will explain coverage that is specific to landlord insurance.

  • Landlord property - This can include furniture or other items you keep at the income property. Property coverage includes items like furniture, clothes, electronics and dishes. Be sure to include enough coverage for all of these items at full replacement value.
  • Landlord liability - This includes damages you could be legally obligated to pay. If your tenant were to get injured on the property and sue you for damages this would provide legal counsel and protection.
  • Loss of rental income - If something happens where a tenant can no longer live there after a loss this will cover the income lost until the unit is habitable again. Don't underestimate this coverage as it is your lifeline to continue owning that property.

What is not covered on a landlord insurance policy?

None of your renters property is covered on your landlord policy so be sure to have your tenants get renters insurance. Renters insurance will cover their property and provide liability protection for them in case they are legally liable for damage to the home.

What other insurance should I carry as a landlord?

In addition to landlord home insurance it may make sense to also have an umbrella policy. Umbrella policies provide liability insurance above and beyond your home insurance policy limits. Most landlord insurance policies offer up to $1 million in liability protection but if you have assets worth more than that it is advised to get an umbrella policy. These policies offer coverage from $1 million to $5 million on average and can range from a few hundred dollars per year up to $1500 depending on what is included. Remember this type of policy only kicks in once the full limits have been exhausted on the underlying policy.

Proper "Loss of Rental Income" Coverage Limits:

Be sure to have adequate coverage for loss of rental income on your landlord insurance policy. Most policies will come with a percentage of dwelling coverage for loss of rental income but this can sometimes not cover your full income during a time of loss. Calculate how much rental income you bring in each month and multiple it by 12 months. This will give you the minimum level of coverage you will need in the event your tenants need to move out during repairs.

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