What Type of Insurance and Cover Do You Need as a Landlord?
Sarah Carey, author
The landlord's insurance policies offer coverage like the normal household's insurance policy, such as dwelling coverage to protect your property in the event of a fire. However, a landlord's policy is specifically written to protect against risks that landlords are vulnerable to, such as increased liability and loss of rent. Because of these extra covers, rental properties are generally riskier, insurance for landlords usually costs up to 25% more than their homeowners. Home coverage is also important because if your home is damaged, coverage can be denied if you only have insurance from a normal homeowner. What Insurance Do You Need as a Landlord? The Best Landlord Insurance you need depends on your insurance company and the duration and frequency with which you rent your property. Here are three common situations: Long-Term Renters: Homeowners who want to rent a house or apartment for at least six months to specific tenants must purchase a homeowner's insurance policy, also known as "Rental Housing Policy". The homeowner's insurance policy is like a traditional homeowner, but it is designed to protect against the losses associated with renting your home. But according to the Insurance Information Institute, homeowner insurance costs approx. 25% more than traditional homeowner insurance. Short-Term Rental Housing: Owners who occasionally rent their main residence for a short period can be covered by the insurance with their current owner. However, you must notify your insurance company and confirm this coverage. Some insurance companies require the addition of an additional driver to cover when your house is rented out. However, the coverage of your homeowner's insurance policy is covered. The Frequent Short-Term Tenant: Homeowners who plan to rent their permanent homes for a short period of time are usually considered entrepreneurs by their insurance companies. As a result, these homeowners are generally not covered by traditional homeowner’s insurance policies. Instead, they must take out commercial insurance specifically designed for their coverage needs. What Does the Property Insurance Cover? Most homeowners’ policies offer protection against three types of damage: Property Damage: Property damages cover damage to the housing structure due to covered hazards such as fire, wind, hail or snow. In addition, the policy covers your personal property, such as kitchen equipment, furniture or television, which you allow renters to use on site. As a rule, your landlord does not cover the ownership of your tenant. Always check the types of coverage listed on the statement page for your rental policy. Liability: Your landlord's liability or health insurance clause legally protects you in case of damage to your property. For example, if a tenant falls and a bone breaks over your property, he may try to prosecute you. In that case, your insurance company will attempt to reach an agreement on your behalf, and you will pay the corresponding deductible profits. Loss of Rented Income: If your property is threatened by a covered risk, for example, if a fire is damaged and you cannot rent the apartment, you can cover rented income through insurance from your owner. Ask your insurance agent if your policy includes insurance against loss of rent or if you need to be added as an optional driver.