Being a landlord can be a rewarding experience both in monetary and non-monetary terms. Landlords have many responsibilities – in addition to being accountable for the regular maintenance and upkeep of the apartments or buildings, landlords need protect themselves against a number of factors that may cause damage or loss to the rental property – and landlord insurance is very helpful for this purpose.
As a landlord – as opposed to a normal homeowner – you can be stuck with a very different set of problems regarding your rental property. Damage caused by tenants, extreme damage to the property, or personal injury that occurred on the property could leave you without the security of your renter’s payments for any stretch of time. We know you depend on your tenants’ rent as a steady source of income, that is why you need landlord insurance.
What Types Of Landlord Insurance Are Available?
There are various kinds of landlord insurance policies available on the market. Depending on your requirements, you can choose a single policy or a combination of policies to protect you and your properties from everyday risks. Following are some of the most important landlord insurance coverages available:
Property Insurance or Building Insurance: This is one of the most basic types of insurance that covers the building and its permanent fixtures. A permanent fixture is generally identified as a physical structure that cannot be removed without inflicting damage to the building. This insurance does not cover non-permanent fixtures, like washing machines. If you have those, you will need a policy that provides a comprehensive coverage.
Contents Insurance or Personal Property Insurance: Contents insurance is aimed at protecting articles that are stored within the apartment building. Items you own such as microwaves, stoves, refrigerators, furniture and laundry washer and driers that your tenants use could be covered.
Liability Insurance: There are variety of claims that could render you legally liable for damages as the owner of a rental property. If a claim is brought against you due to personal injury or damage to the tenant’s belongings caused by your property, most landlord insurance policies can reimburse you for any legal liability up to your claim limit. You will also be protected for non-injury claims brought by your tenants, including wrongful eviction, wrongful entry, libel, or slander.
Flood Insurance: Commercial flood insurance is a must, if the property is located in a flood-prone area. Often the mortgage company will require it. Flood is a separate policy from your main property policy.
Loss of Rent Insurance: We know you depend on your renters’ payments. If your rental property is declared unlivable due to extensive damage, your insurance plan will reimburse you for the cost of the rent your tenants would be paying you while repairs are completed.
What Does Landlord Insurance Cover?
The landlord insurance policy typically covers the property of the buildings you are renting out, including the dwelling and personal property you own and you keep on site to help maintain it. It also covers liability for another person’s medical bills or your legal expenses if someone is injured on your property. Coverage generally includes:
- Dwelling: Helps protect the rental building itself due to damage by fire, lightning, wind, hail or other covered losses.
- Other Structures: Helps protect you against damages resulting from a covered loss to your rental property’s detached garage, storage shed or fence.
- Personal Property: If you have lawn mowers, weed whackers, shovels or other tools onsite used to maintain your rental property, landlord insurance may help cover this equipment if it’s damaged or stolen.
- Liability: If a tenant trips on the walkway to your rental property and a court determines that you failed to maintain the walkway, you could be held liable for your tenant’s medical, legal and other costs.Here your landlord liability coverage may help pay for those expenses.
Extra Landlord Insurance Coverage
You may want to add optional coverages to your landlord policy. Some of the more popular ones are:
- Vandalism & Burglary – You may want extra protection to repair vandalism damage or replace items stolen from your rental (like appliances). Also, if someone vandalizes the property, those damages typically aren’t covered by a traditional landlord policy unless you purchase an additional vandalism rider.
- Umbrella Policy – If you higher liability limits than the basic landlord policy offers, commercial umbrella can help. It is excess liability coverage that sits on top of your basic liability limit.
- Building Renovation – If you are you renovating your rental property, you can purchase special coverage to help protect it until it’s ready to be occupied.
- Building codes – If you’re repairing a part of your building after it’s been damaged, you might be legally required to upgrade items like wiring, piping or ventilation because your municipality building codes may have changed since your property was originally built.
What Landlord Insurance Doesn’t Cover
Landlord typically does not cover:
- Equipment Breakdown – If the furnace or dishwasher in breaks down, most likely you will have to pay out of pocket for any repairs.
- Property You Share – If you live in the property and rent out another part to a tenant, you’re typically not eligible for a landlord policy, as landlord policies are for only for “non-owner-occupied” property.
- Tenant’s Belongings – Landlord insurance does not cover your tenant’s personal possessions like furniture, computers. electronics, clothes, etc. Your tenants will need to purchase their own renter’s insurance policy to cover their belongings.
How Much Does Landlord Insurance Cost?
How much does Landlord insurance cost? The premiums vary depending on the amount of risk exposure, and it depends on the endorsements and deductible selected. Following are some of the main factors that go into the price of a policy:
- Location – The more dangerous your location is, for both natural and human risks, the higher premiums you will pay as there is a higher probability for claims.
- Building Size – The more square footage your property has, the more the premium will be.
- Deductible – The deductible is your out of pocket cost before your policy kick in. Lower deductible = higher premium, and higher deductible = lower premium.
- Security Precautions – Having a central fire alarm and security system can lower your premiums.
- Claims History – If you have made claims in the last 5 years your land lord insurance will cost more.
The amount of coverage provided by the insurance company can one of 2 types:
Replacement Cost – Replacement cost is a coverage that will pay you enough money to replace your belongings with “like kind or quality” up to the limit of the policy you have. This should not be confused with guaranteed replacement of your items; instead it’s like kind or quality. So you wont get an upgrade to what you lost.
Actual Cash Value (ACV) – Actual cash value is the amount of money that the item was worth, minus depreciation for the wear and tear since you’ve had it.
Get A Landlord Insurance Quote
Being a landlord can be stressful and time-consuming, but you can eliminate one worry from your life. Contact us today to find out the best way to get protection for all of your rental properties. We always take into consideration how much your properties are worth and recommend insurance that will protect your income and assets if you are found at fault and sued.
Different States Landlord Insurance
If you are looking for state specific Landlord Insurance quotes, costs and information: