Landlord Insurance

Landlord Insurance

Landlord Insurance

Landlord insurance and homeowner’s insurance are two very different things. In fact, a standard homeowner’s insurance policy won’t cover you for the risks associated with renting out your property. That’s because a homeowner’s policy typically only covers owner-occupied single-family residences. So, when your home no longer meets that definition because you are renting it out regularly, you lose your coverage. Landlord insurance provides coverage for property owners renting out one or more residential homes, apartments, or condos.

As a landlord, you need protection from financial loss that may result from damages to a rental property due to fire, break-in, severe weather and more. Each year, tenants sue property owners for all kinds of reasons. If and when this happens, landlord insurance can help rental property owners stay business. With this in mind, we offer some more insight on why you need landlord insurance.

Why Do You Need Landlord Insurance?

Landlord insurance protects landlords from risks associated with their rental property. It usually includes buildings and contents insurance. But, it can also include landlord-specific things such as property owners’ liability, loss of rent, and tenant default insurance. For example, if your rental unit becomes uninhabitable due to reasons beyond your control. It can cover the loss of income. While it’s not required by law, you should get landlord’s insurance if you collect rent and manage a rental property.

Every landlord needs landlord insurance because it protects you from financial loss resulting from accidents, natural disasters, injuries, and other liability issues associated with your rental property. Additionally, it also provides reimbursement for loss of rental income and can cover any repairs or even the entire replacement of a rental property structure. Keep in mind that this type of coverage is only intended to cover the financial loss of the landlord. It does not cover a tenant’s belongings. For this reason, making renters insurance a necessity to rent from you would be a very wise decision.

Rental Property Insurance: Types of Coverage

As a landlord, you’ve got a lot invested in your rental property. Not just your money, but also your time. Rental property insurance provides several types of coverage. Depending on the insurance company and the options you choose, your policy can consist of some or all of the following:

  • Property Damage: covers damage to your buildings and property
  • Liability Insurance: protects you against liability claims and lawsuits
  • Loss of Income: compensates you for loss of income in the event a rental property becomes uninhabitable due to a covered loss
  • Optional Coverage: other coverage you can buy such as rent guarantee insurance, employer liability insurance, landlord contents insurance, and natural disaster insurance
Landlord Insurance

Conclusion

Landlord insurance offers you protection from financial losses related to damages or injuries. Whether you own a single-family home, condo, or an apartment building, landlord insurance is a necessity. Remember, as a landlord, you have unique business risks and assets that aren’t covered by a homeowner’s insurance policy. Additionally, requiring renters insurance in your lease adds an extra layer of protection. So, make it mandatory in your lease agreement, that way, you can increase the coverage on your rental, and lower your costs in the long term. Of the most strategic ways to ensure your lease agreements have a renters insurance clause is having a professional property management company do the work for you. Contact us today at (858) 576-2176 to learn more about our property management services.