Do you want to learn about landlord insurance policy? You are covered by our landlord insurance guide.
Becoming a landlord has its own set of risks and responsibilities. Maybe you own a rental or a portfolio of several.
It is essential to protect your investment and secure your financial stability.
This is where landlord insurance policy plays a major role. This insurance is designed to provide coverage for the unique risks that landlords face.
In this article, we will explore what the landlord insurance policy covers and give you a broad understanding of its importance.
READ MORE: What Does Landlord Insurance Cover?
What Is Landlord Insurance?
Table of Contents
Landlord insurance covers dwellings like a fence, personal property and liability. It also covers the loss of rental income.
Also, you will find similarities when you compare landlord insurance and homeowners insurance.
A standard home insurance policy mostly won’t cover damage to a rental property and won’t help get lawsuits against you involving the unit.
The expanded landlord insurance includes coverage for stolen property, defacing, and additional construction expenses to bring the building up to code.
Is Landlord Insurance Required?
Some states don’t need landlord insurance but it is. Nice idea to ensure your investment is well covered. Most lenders require landlord insurance if you have a mortgage or you are financing the property.
This is because lenders have a financial stake in your property, so they make sure it’s covered. When the lender doesn’t ask for the landlord’s insurance, it will be nice to buy the coverage.
What Does Landlord Insurance Cover?
Landlord insurance covers apartments, unattached structures on property and personal property.
Moreover, it includes liability coverage and loss of rental income when your property is damaged by the problem covered by the policy like a fire and you can’t rent it out.
The following are types of coverage you will likely see in landlord insurance policies:
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Dwelling Coverage
Generally, it covers all physical damage or loss of property by problems like wind, hail and fire.
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Other Structures Coverage
Some structures that Are not connected to the property like a fence, can be covered under the policy.
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Personal Property
It covers damage to your possessions that you can use to maintain the rental property like a lawnmower.
READ MORE: What Is Landlord Insurance? What Does It Cover?
How Much Is Landlord Insurance?
The cost of this insurance policy depends on the kind of property you are letting out, how much it’s with and the amount of coverage you require.
Insurers will work out how likely you are to make a claim and the potential costs involved, this means the cost of landlord insurance policies can depend on your circumstances.
Types of Landlord Insurance
Landlord insurance covers a diverse range of protection.
However, the type of landlord insurance coverage you need will be decided below.
The types of landlord insurance are:
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Building Insurance
Buildings insurance is a common type of landlord policy and gives protection if your rental property’s structure is damaged.
Also, It covers everything about rebuilding the property when it is damaged beyond repair.
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Landlord Contents Insurance
You won’t be asked for a landlord contents insurance policy to protect your tenant’s belongings.
However, maybe you rent out your property on a furnished basis, this insurance protects the items against harm from flood, fire and theft.
Also, landlord insurance covers malicious or deliberate damage to your belongings caused by tenants.
But it is usually not a standard part of this insurance policy, so ensure you carefully check your policy if it is something you require.
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Fixtures And Fittings
Fixtures and fittings in your investment property cover the major building insurance policy. This insurance includes bathroom suites, internal doors, carpets and flooring, and integrated appliances.
However, if your property is a leasehold flat, this insurance might not cover the freeholder buildings insurance policy. This is where the fittings policy is beneficial.
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Accidental Damage Insurance
Accidental damage insurance covers everything that needs to be repaired or replaced in your rental property damaged by an accident.
The coverage includes holes in walls, broken windows, and stains on carpets. Also, this insurance doesn’t cover you for wear and tear or if your tenant damages your property on purpose.
Remember that policies don’t cover damage caused by animals or poor workmanship by tradespeople, either.
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Legal Expenses Insurance
Legal expenses insurance can cover all the costs needed to end a legal dispute with your tenant. The element of landlord insurance often includes automatically, so pay attention to your policy.
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Rent Guarantee Insurance
Loss of rent in insurance will assist you to protect you from loss of income when your tenant falls into rent arrears. Maybe you are unable to rent the property because of damage caused by natural disasters.
Some insurers may not cover all these eventualities in one policy, so ensure you check it before you start.
These insurers can offer accommodation to cover the cost of alternative accommodation for your tenants when they are no longer able to safely live on your property.
READ MORE: Best Landlord Insurance Policies of 2022.
Conclusion
A landlord insurance policy serves as an important safeguard for landlords, providing financial protection and peace of mind. It also covers property damage, Liability protection, loss of rental income, tenant damage and legal expenses.
