Landlord Insurance for Owners of Rental Property
If you’re the owner of rental property, then you should have landlord insurance. In fact, this should be in place before your first tenant signs the lease. As a landlord, you need insurance that covers possible mishaps that might occur on rental property. Homeowners insurance is not appropriate to meet this need.
Am I a Landlord?
Some people are not typical landlords. The term “accidental landlord” has come into use because people are finding themselves renting their homes, apartments, and spare rooms in order to bring in some extra cash. These people are not the target market for landlord insurance. If you are sharing an address with your tenant, then a rider may be sufficient. The difference is when the tenant lives on a separate property that you own. This includes situations in which you live in the same complex but in another unit.
Landlord insurance policies blend characteristics of business insurance and home insurance. Generic coverage includes the interior or exterior of the home. It is usually covered in the event of vandalism. However, the policy may not cover some natural disasters such as flooding and earthquakes. Coverage for those is purchased separately. When a tenant, guest, or trespasser is injured on the property, then your policy will cover some or all of the costs. If a lawsuit results, then these policies will also cover some or all of the fees associated with a trial.
This type of policy might also include loss of income coverage. Then there’s the most common coverage, which is protection against theft, fire damage, and financial assistance if the building becomes uninhabitable. For example, if a fire causes tenants to move while the building is repaired, then the policy will actually pay the rent for a time.