Landlord insurance can be complex and requires a deep understanding of policy differences and the property type. Working with an experienced insurance expert is the best way to get the right policy and protection level in place.
Installing safety measures, bundling policies and other discounts can help landlords cut costs. This is especially true for multifamily properties. Click on Leading Insurance Outsourcing Company for more info.
Coverage Options
Landlord insurance policies provide a range of protection for landlords. A standard policy covers the landlord’s property, but it may also include other structures such as a fence or a garage. It also provides loss of income coverage in the event that a rental becomes uninhabitable.
Many landlord policies offer optional coverages, such as burglary coverage that reimburses the landlord for his or her personal property stolen from the rental. However, this does not usually cover the renter’s belongings; they would need a separate renters policy for that.
Additionally, many landlord insurance policies allow you to choose a deductible that impacts your monthly premium. A higher deductible will lower your monthly payments, but it also increases the amount you will have to pay out of pocket in the event of a claim. Some insurers offer discounts for bundling landlord policies with other policies such as home, auto or a Personal Articles Floater, which can protect high-value possessions like jewelry and art.
Liability Coverage
Being a landlord comes with well-known risks, and the right insurance coverage can help offset them. Landlord liability coverage can help protect you from the costs associated with a tenant or guest’s injury or damage to your property, including X-ray and surgery costs, lost wages, and legal fees.
Dwelling coverage is another key component of landlord insurance, and it can cover the cost to repair or rebuild your rental home from damage caused by things like fire, windstorms, and burglary. It can also include structures outside the home, such as sheds or garages.
While specifics vary by provider, most landlord policies offer a minimum of actual cash value (ACV), which reimburses your rental home for its depreciated rebuilding value, and risk value limits of $5 million or higher. Additionally, you can typically add coverage for vacant structure protection to a landlord policy. This can be a great option for homeowners who rent their homes to military members and veterans.
Optional Riders
Many landlord policies come with optional riders. For example, a non-occupied dwelling endorsement ensures that the property is covered even when no one lives there. Some landlord policies also include heating or air conditioning loss reimbursement, which helps if your property experiences problems while a tenant is living there. Another optional rider is rental income loss insurance, which reimburses you if your rental home can’t be used due to damages from a covered peril.
Landlords in flood-prone areas may need to buy separate flood coverage. Other options include property under construction coverage, which covers damage to the skeleton of the building while renovations are being completed. Vandalism coverage is also an optional rider, which helps to cover the cost of repairing vandalism-related damage that may not be covered by your standard policy.
Tenants’ personal property isn’t typically covered by a landlord policy, so you should require them to get their own renters insurance before moving in. This will protect you from costly claims from visitors who are injured on the property.
Bundling
Landlord insurance policies offer a variety of bundled coverage options. The core of the policy is often buildings and contents cover, which provides compensation for loss of property or repairs. Additional covers include legal costs, landlord liability protection and additional living expenses (ALE) cover.
Bundling typically allows for a discount on the premium. This is especially helpful for landlords who own multiple properties or have a history of claims-free insurance.
Getting the right landlord policy is essential to safeguard your property and income. You may also be able to reduce the cost by requiring tenants to get their own renter’s insurance and taking out the policy yourself on a long-term basis rather than a short one. The IRS considers premium payments for landlord insurance to be a normal business expense. The best way to know whether this policy is right for you is to run a quote. We’ll compare a wide range of options and prices for you, so that you can find the perfect policy.
