Virginia landlord insurance is the key policy each rental property owner needs to maintain a profitable income. Insurance is for the bad times and when the going gets tough the tough better have insurance. Home insurance is not the same as landlord insurance if you rent your property to others so make sure you are properly protected. Companies do have the right to deny a claim if you don't have the right type of insurance on your investment property.
Landlord Insurance in VA versus House Insurance
The biggest difference between house insurance and landlord insurance is the liability protection offered to the owner. If you rent your home to others you have an increased liability due to the nature of having other people live in your property. Landlord liability insurance will cover you if the tenant is injured while at the home due to your negligence. In Virginia there can be a lot of wind during the winter months which may lead to a tree falling on the property which would cover you against a potential lawsuit for injuries.
One thing that is not covered on a rental property policy is the tenant's personal property. This is why you should require each renter to have a renter's insurance policy. Your landlord policy will cover contents that belong to you but any of the tenant's belongings will need to be insured with a renters policy.
Cost of Landlord Insurance in Virginia
The cost to insure your rental property in VA 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.
Here are a few of the 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 VA
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.
Virginia's 5 largest cities by population
City - Population
Virginia Beach 437,994
Norfolk 242,803
Chesapeake 222,209
Arlington 207,627
Richmond 204,214
*Data from 2010 Census Population by the Department of Economic and Community Development.
Common Landlord Insurance Claims in VA (Virginia)
Wind
(Most claims cost over $4,500 to repair wind damage)
Fire
(Most claims cost over $70,000 to repair damages from fire)
Water
(Most claims cost over $5,700 to repair damage from water)
Lightning
(Most claims cost over $3,600 to repair physical damages to property)
Dog Bite Liability
(Most claims cost over $22,100 to recoup liability damages)
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.
