Landlord Insurance

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What is Landlord Insurance?

For anyone who owns a rental property they know that finding a good tenant is key to a successful income unit. Well that can also be said for having the right insurance in place in case something bad happens which it inevitably will. In this article I will explain what landlord insurance is and what it will cover in the event of a loss.

Landlord insurance is very similar to homeowner’s insurance but it is a different policy with greater coverage for those who use the property for rental income. There are many different types of landlord policies but the main point is that you must have a policy designed for rental properties or you may not be covered completely. Here is a list of commonly found coverage on a homeowners policy:
  • Dwelling Property - Also known as building coverage, it covers many types of damage done to your home including hail, wind, and vandalism.
  • Personal Property - Usually based on a percentage of the building property, it covers loss or damage to items like clothes, electronics, and furniture.
  • Liability - Pays when you are legally liable for someone else's bodily injury or property damage resulting from accidents. This includes costs to resolve claims or defend lawsuits brought against you.
  • Medical Payments - Rarely used but on most home policies this will pay for medical expenses for people injured at your residence regardless of liability.
  • Additional Living Expenses - When you are forced to live elsewhere while damage is repaired to your home this will pay for additional expenses commonly up to 24 months or a specific coverage limit.
The items listed above are usually covered under most comprehensive homeowner’s policies but there are items that need special coverage or have different use on a landlord insurance policy. As you can imagine there are different things that can happen when you rent your property versus living in it. This can expose you to more liability and perhaps more severe damage due to not being there to mitigate immediately. In addition to the coverage listed above here are few important differences or additional coverage items on a landlord policy:
  • Loss of Rental Income - This replaces "Additional Living Expenses" and is used when a loss forces your tenants to move out while damage is being repaired. The loss of rental income during this period is covered.
  • Landlord Liability - This is similar to liability protection on a homeowner policy but if you don't have landlord policy your insurance carrier could deny your claim as you did not inform them the house was rented to others.
  • Water Backup - Water is a homeowner’s worst nightmare especially if you don't have water backup coverage. Most standard policies will not cover a backup from sewer systems so this coverage is vital.
  • Identity Theft Protection - Some insurance companies offer this as an additional coverage. This is the fastest growing crime worldwide and you as a landlord need protection. Identity theft protection can cost as little as $8 per month and we partner with a leading organization that compare identity theft protection products.

Make it look like you are home:

It is very easy to find a house that is vacant because you never see the lights come on at night and the lawn is over grown. This is a welcome mat for vandals or theives who look for easy targets. If you visit the property once a week you can cut the grass, collect the mail, and turn on a different light each time. If you can't do this have a friend do it because it will save you a lot of time and money later.

 

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