Landlord insurance is important to have if you own one or more rental properties occupied by tenants. This type of insurance provides you with protection from financial loss if your rental property becomes damaged or uninhabitable. Your homeowner’s insurance will not cover damage that occurs to your rental property, nor will it cover any personal liability claims. You are not required by law to have this insurance, but it is highly recommended that you get this insurance for your rental properties.
How does it work?
This insurance works in two ways. First, you are financially covered minus the deductible if your rental property is damaged because of a fire or natural disaster. If the damage causes your rental property to become uninhabitable, then your loss of income coverage will provide you with an income while your property is being repaired.
Second, you are covered if there is damage to your property and a tenant or a visitor falls and is injured because of that damage. Your liability coverage will cover the cost of their medical care. If the injury is severe and the tenant or visitor decides to file a lawsuit against you, your insurance will cover legal costs minus the deductible.
What does this insurance cover?
Your landlord property insurance will cover you from financial loss if your property is damaged from:
• Tenant damage
• Storm damage
Your insurance may also cover the cost to replace your rental if your property is destroyed.
Your landlord liability insurance will cover the cost of legal claims, medical treatments, funeral costs, and settlement or judgment costs if a tenant, visitor, or trespasser is injured on your property due to negligent maintenance on your property. Your insurance will also cover you if your property causes damage to your neighbor’s property. Additional insurance coverage includes:
• Loss of income
• Rent guarantee
• Natural disaster
• Employer liability
• Landlord contents
It’s important for you to work with an insurance agent who can provide you with the proper information and advice. This will help you to make the right decision when choosing a landlord insurance policy.