Georgia landlord insurance offers a level of protection that is just not offered with a standard home insurance policy. If you rent out a home in Georgia you need to have a landlord insurance policy that protects you against lawsuits from tenants, building property damage, and loss of rental income to name a few.
In the event something was to damage your rental property you may not be covered if your insurance carrier does not know you rent the home to others. Get the proper coverage and protect your investment property business with landlord insurance.
During the downturn in housing many homeowners turned to renting their homes until the market comes back. Unfortunately home values are still depressed and it may take a long time for that to reverse. The good news is that there are plenty of renters looking for quality homes to lease. This can be a great time to maintain a steady income until you want to sell the property or keep it for future income. During this time you need to have landlord insurance which is different than a basic homeowner's policy.
Landlord insurance allows you to be covered for items like landlord liability, loss or rents and building damage to the rental unit. Many homeowners turned landlords are not familiar with this type of policy and don't inform their insurance company until it is too late. Some insurance carriers will not cover a claim if they are not insuring it as a rental property so be sure to change the policy to the proper type.
Landlord Insurance Covers More Than Home Insurance
There are three primary coverage's that landlord policies provide that a standard home insurance policy will not. This is not an exhaustive list of the difference in policy types but rather a way to tell them apart.
- Landlord Liability Insurance - Protects the landlord against potential lawsuits related to the operation of that property as a rental. This can include injuries the tenant may get if the property has not been properly maintained by the owner.
- Loss of Rents Insurance - If during a covered loss your tenant's need to move out and you are not collecting that rental income you can get a portion of it back.
- Landlord Building Insurance - This is the primary coverage for the building which is similar to dwelling coverage on a home insurance policy.
Make sure you have the proper policy if you rent your home to others as it could come back to cost you more in the long run. The fact is landlord insurance is not that much more expensive than home insurance and can be less if you minimize certain coverage you don't need.
Coverage You Can Minimize on Landlord Insurance Policy
The one coverage item you could reduce on your landlord policy to help save you money is contents coverage. This is designed to cover the personal property of the landlord not the tenant so make sure you have enough if you leave contents there. Items such as furniture would be included in contents so if you furnish the unit be sure to include the replacement value of these items.
Cost of Landlord Insurance in Georgia
The cost to insure your rental property in GA is dependent upon numerous rating factors that home insurance companies use to determine the proper premium. When you own a condo or townhouse the cost of landlord insurance is very minimal because usually you split that cost with the homeowners association which insurers the exterior of your unit. If you insure a single family home or rental complex then your insurance costs are going to be much higher due to the replacement cost of the building is solely your responsibility.
Most common rating factors that insurance companies use to determine your landlord insurance premium:
- Credit rating - This is your personal credit rating which is similar to a FICO score but can be based on other specific criteria such as payment history and bankruptcy.
- Location - The zip code or city that your rental unit is located in has a dramatic effect on your insurance premiums as companies who have big losses in those areas will increase rates to get profitable.
- Building type - This can be numerous things including condo, single family, and townhouse including the materials used to construct the property.
- Claim history - If you have one or more claims in the past 3 years as a homeowner most insurance companies will surcharge your premium. Some companies may not even accept your business if you have more than two.
- Discounts - If you have more business with an insurance carrier they are more likely to offer discounts to keep all of your business with them.
How to Find The Cheapest Landlord Insurance in GA
Each insurance company is different in the way they determine your rate and how much the average policy will cost but here are ways to ensure the lowest cost premium based on the factors above.
- Good Credit - The better your credit the lower the cost of your insurance. Many states are now allowing credit as a rating criteria so get used to it being used. Try to keep your past payment history spotless and a FICO score above 720 is considered excellent.
- Improve the Location - There is not much you can do about the location once you have purchased the rental property but be sure to keep the home well-kept and surrounding trees cut back to minimize potential hazards. The better your property appears the lower the cost to insure it will be.
- Building type - Condo and townhouse owners will likely have a home owners association which will cover the exterior of the home so you are only responsible for the interior. This can save you hundreds of dollars each year. If the unit includes custom building and expensive materials expect to pay more because the cost to replace those items is greater.
- No Claim history - Try not to make a claim if it is a small value of $2000 or less. Most companies look at multiple claims as a sign that you are prone to making claims in the future. If you are deciding whether to make a claim or not contact your insurance agent and ask them personally. Don't call the claim department and ask them because they are likely to document the call and file it for future use.
- More Discounts - Ask about multiple policy discounts and the combination of auto and home insurance. Sometimes combining your personal auto insurance with this policy can save you 20-30% off each policy.
Georgia's 5 largest cities by population
City - Population
Atlanta 420,003
Augusta 195,844
Columbus 189,885
Savannah 136,286
Athens 115,452
*Data from 2010 Census Population by the Department of Economic and Community Development.
Common Landlord Insurance Claims in Georgia
Wind
(Most claims cost over $7,500 to repair wind damage)
Water
(Most claims cost over $7,900 to repair damages from water)
Hail
(Most claims cost over $8,500 to repair damage from hail)
Lightning
(Most claims cost over $10,500 to repair physical damages to property)
Loss of Rental Income
(Most claims cost over $2,500 to recoup lost rental income)
NOTICE: The amounts listed above are for illustrative purposes only and should not be used to decide what coverage limits you need for your landlord policy. Speak with your insurance agent to determine the proper coverage limits.
