Landlord Insurance

Owning a rental property is another source of income but first, you need landlord insurance. By the way, your homeowner insurance policy covers a totally different thing from this.

So, if you ever decide to convert your home to a rental property, then, you must review your insurance policy. Inform your insurance company about the big change or you go online and get quotes for a landlord insurance policy from respected companies.

What is Landlord Insurance?

Landlords insurance is a type of liability coverage that protects landlords and property from lawsuits arising from their tenants. 

Ultimately, landlord insurance may be liable for bodily injury and property damage that occurs on the landlord’s property. 

As a renter, you may think your landlord’s insurance covers you in the event of an accident. While that may be true in a legal sense, in practical terms you may be exposed to very substantial losses in the event that something goes wrong.

For example, if you or your family are injured in the home, or your personal belonging got damaged, your landlord’s coverage may not help you out financially.

Furthermore, landlords insurance is also known as rental property insurance. It only goes ahead to protect the building you live in which is also called a ‘rental property, and its contents against events like fire, theft, and vandalism.

Landlord insurance and Homeowner insurance

Now, these two coverage sounds the same but they are totally different. Of course, they are both very important but they serve different purposes.

Landlord insurance

First, this insurance is purchased by the property owner and not the tenants or the temporary occupiers of the property.

Moving forward, as a tenant looking out for a property to rent. For your interest, you should only look out for properties with this kind of coverage. This is because, while it does not protect you directly, it covers anything within the property that might be useful to you.  

That is, while this type of insurance is important to have, though, it specifically protects only rental properties, not your belongings.

So, you should still purchase renters insurance. This coverage generally protects your belongings from theft, fire, and a wide range of other common disasters.

And by the way, your landlord policy rarely pays for any losses resulting from an accident you cause as a tenant.

 Homeowner insurance

Meanwhile, your homeowner insurance covers your personal home where you live with your family. This coverage covers your property and everything within from any unforeseen dangers like fire, natural disasters, theft, and any form of vandalism.

What landlord insurance covers

Just like all other types of coverage, this type all depends on what you want to cover. So, after shopping for quotes and picking an affordable and good company.

You begin the task of deciding on what you want on your coverage and what you do not want. Also, communicate with your insurance company so they can draw up a suitable plan for you.

To continue, what this coverage can protect include:

Property damage

This coverage typically targets your property protection. The coverage protects all the structures within the premises from any form of damage like when fire accidentally guts down the property. This is when this clause kicks in.

Liability insurance

Basically, this helps you to protect yourself from any kind of lawsuit that will stem from your property. This coverage will kick in if an injury happened on your property due to your neglect of a harmful object. So, if the injured decides to sue, this coverage will protect you from financial loss and legal expenses.

Loss of rental income

Furthermore, in the event that your rental property becomes inhabitable due to some circumstances, your insurance company will pay you some amount of money for loss of income from the property.

Tenant damage

You might literally be unfortunate to take in the rough kind of tenants. They get things spoiled and broken on the premises of your property. This coverage runs to your rescue in such events. Moreover, do let your tenant know the consequences of damaging the rental property.

Cost

First, there are determining factors that will decide the amount you pay for your premiums.

Company

For starters, your policy provider has the upper hand on what amount their customers must pay on a particular coverage. So, choose your provider wisely.

Environment

More so, there are places known as risk areas. These places are more prone to natural disasters. Providers make homeowners and landlords pay a higher premium than people in a low-risk environment.

Therefore, your property environment plays a huge role in the cost of your premium.

Size

The size of your property matters a lot too. A smaller property calls for smaller premiums. While a larger property requires a higher amount in premium for you.

Extra security

Also, having some type of extra layer of protection on your property makes a huge difference for you. Like, smoke detectors,  burglar alarms’

The number of structures on the premises

This is a crucial part of your policy. the number of structures erected on the premises will add to your premium.

Do your tenants need coverage?

Of course. Though it is not against the law if they did not have. However, it is in the best interest of everyone for your tenants to purchase coverage. In fact, many landlords are not making it compulsory for anyone approaching them for a rental to carry some form of insurance. After all, they need to protect their belongings.

Is this coverage a must by the law?

Absolutely not. The landlord insurance is open for whoever wants. Not having does not mean that you are breaking the law. However, your car insurance is a must in most states in America.

Benefits of the Landlord insurance

Financial Protection

It removes you from financial harm’s way. You are secured from property damage that can cause you huge financial expenses.

Liability protection

First, someone might get injured behind your back and sue you for negligence. Instead of the legal charges and expenses. This coverage picks up the legal charges and other expenses like medical bills of the injured.

Top companies that provide Landlord insurance

American Family Insurance

Farmers Insurance Group

Liberty Mutual

Foremost

Geico

Allstate

State Farm

Travelers