Landlord insurance, which is actually an expanded version of homeowner’s insurance, can be an effective safeguard that will compensate a landlord from losses which may arise from situations such as fire damages, lost of rental incomes, lose or damage of the landlord’s properties which are used by the tenant, and some maintenance. In addition this type of insurance will also cover the landlord against possible legal fees arising from an injury which a tenant may contend as attributable to the property.
Landlord insurance is therefore a sensible and vital measure that property owners should invest in since the situations enumerated above are realistic and common cases that often occur in many rented properties. It is not something to be ignored and taken for granted or else a landlord may just find himself mired and facing costly expenses for damages or legal fees. In the worst case scenario, you lose the entire property. A landlord with good business sense should always see the wisdom behind investing in this type of insurance coverage which ensures the long term viability of the renting or leasing venture.
What Does Landlord Insurance Cover?
As mentioned earlier, landlords insurance is just an expanded form of homeowner’s insurance that provides additional options to a property owner who or rents his property. So what are these common additions that distinguish it from standard home owners insurance? There are basically four aspects to a landlords insurance coverage and these are buildings insurance, contents insurance, loss of rent insurance, and landlord liability insurance. We will discuss each in detail.
Landlord Building Insurance
Similar to homeowner’s insurance, landlords building insurance is basic coverage that will insure a leased property from risks of damage or total lost which may be brought about by events like flooding, fire, storms, or earthquake. It also includes coverage for repairs in situations such as burst pipes or malicious damage caused by the tenant. In other words, the insurance company will compensate the cost that you may incur from repairs in case of damage.
The total amount that a landlord could claim would be determined normally by the price of premium he is willing to pay or to the assessed value of the property being insured. It will all depend on the particular insurance company he is dealing with of course.
Landlords Contents Insurance
As a landlord, you may need to install some items to furnish the property as part of the services you extend to the tenants to maintain the building. Landlord’s insurance will also provide coverage to them in such situations where these things are damaged or stolen by the tenants. Examples of these items include carpets, sofas, chairs and even televisions sets. Sometimes, despite careful evaluations during the application process, there are still unscrupulous tenants who could escape scrutiny. It would be wise, therefore to have protection from the risk and liability of their acts.
Lose Of Rent Insurance
This is a very important coverage in cases where a landlord loses the regular rental income he earns from the property due to damage a fire or other natural disaster causes. This renders the building unfit for habitation until necessary repairs or rebuilding are accomplished. During those times, this coverage will compensate the landlord for the income he should have received if such situations did not occur. This type of landlord insurance may also include guaranteed rental payment should a tenant refuses to pay the rent.
Depending on the kind of policy you agreed to, the period of coverage will vary in the number of months that you will be compensated for the loss income.
Landlord Liability Insurance
A landlord will never know what accident may befall his tenant while living in his property. The worse scenario is that you will be blamed and sued for such accident due to negligence. This can lead to costly legal fees. Landlords insurance will cover the legal expenses incurred by the property owner during the trial should a tenant file personal injury claims in court. This protection can also extend in scenarios where the tenant obtained a favorable judgment from the judicial process.
Meanwhile the landlord can also use this coverage should he have to resort to legal issues over evicting a bad tenant who maybe delinquent on his rent or violating the terms of the lease contract by carrying out illegal activities.
How Much Is Landlord Insurance?
The cost of your premium will depend on the coverage that you have. The good thing about this type of insurance is that it is flexible and you can choose to include some coverage and exclude others depending on your situation.
The amount of premium to be paid will vary from property to property but the common factors that will determine cost are the property’s assessed values and the kind of coverage that you choose. The higher value of the property, whether its residential or business, will naturally result in higher premium. Having more coverage will also do the same to the cost of landlord’s insurance.
There are many insurance companies now that offer the best deal for property owners who wants the complete coverage but in minimal cost. So take time to compare prices and benefits and choose the one best for your needs. If you come to think of it, the cost will be minimal in the event that a property will be subject to repairs or rebuilding if totally lost.
How To Get The Best Landlords Insurance For Your Property?
So what landlord insurance advice must a property owner heed in order to insure that his property is properly protected? There is indeed a need for careful consideration before a landlord enters into an insurance contract with a particular company. Here are some reminders to keep in mind before doing so.
- A standard home insurance will not be enough. If you are a landlord, the basic coverage discussed earlier should be included since there are significant considerations once tenants are occupying your property. Be sure to be completely covered and protected from possible liabilities.
- Expand your options and take a look at a wide range of insurance policies being offered in order to get the best deal. Compare them as well as let the insurance agent explain clearly the terms and conditions of the contract. This way you can get the right one with the right cost.
- A property owner should declare the real value of the property and should not sacrifice limited coverage for low cost premium payments. It would be a useless coverage once you file claims for the property that is totally damaged. One may also think that he knows or he is a close friend of the tenants so that liability insurance should be dispensed for lower premium. That maybe the case but you can’t be sure until the legal summons arrived and you will need a lawyer.
- Cover yourself from the risks posed by tenants who will not pay rent and are very hard to evict from the property. You will certainly lose income and incur legal fees to get rid of them so get the loss of rental income and liability coverage.
- Read and understand the policies and know what exactly will be covered on the various insurance policies. For instance know what causes of damage are covered, how long will the lose of rental income coverage last, and what will the liability insurance will include.
As a landlord, the properties you are renting or leasing to tenants are sources of income and an investment that should be protected . Having home insurance for landlords will certainly give you the assurance that you and your properties will be protected when the unthinkable happens.
Marcus Latchford of Endsleigh on the importance of getting the right landlord insurance for your rental property.
Frost damage, wear and tear and unoccupancy of your property are the most common claims rejected by a claims department of a landlord insurer.