If you are a landlord or thinking of becoming one by purchasing a rental property in the coming years, for that you need landlord insurance. Buying landlord insurance is not easy, it is critical. Whether you are renting out your apartment, a house or space inside your home, purchasing insurance protects you and your property.
You need a landlord insurance policy if you have tenants who pay rent to protect your rental property. With Landlord Insurance policy, you can protect your properties to guarantee that you’ll be protected if something goes wrong.
Landlords are legally responsible for damage or injuries that occur at your rental properties. Right insurance cover will reduce your risk of a serious issue causing you monetary ruin or loss. However, every landlord insurance policy is not created equal! Therefore, it is vital to know which types of coverage can and should be combined in the landlord’s insurance policy.
Differences B/W Homeowners and Landlord Insurance:
If you are of the point that homeowner’s insurance policy would be enough to cover you as you turned your home into a rental property or when you purchase some investment property, think again! Some landlords are confused especially managing their first property, about the difference between homeowners & landlord insurance. Homeowners insurance usually covers single-family, owner-occupied homes. When you have rented out your property to renters, your home is not your only home now, so, it will no longer be covered.
Most of the homeowners’ insurance policies will include the infrequent, short-term rental, for instance, if someone stays at your home to make sure everything stays in order when you are going away for several weeks. However, if you have a summer home and deciding to make it a rental and are renting to different people every week, that is a much bigger risk for the insurance company.
When you rent out your property on a full-time basis, the probability of risk increases for you and your insurer. Your responsibilities increase for injuries on the property, whether it’s your tenant or their guests. This is because renters take less of the care of the rented property than the owners would be. Renters usually tend to identify or report maintenance less, and they are less familiar to a home’s system i.e. where the water shut-off is located.
Components of a Landlord Insurance Policy:
There are three components, the Best Landlord Insurance policy has;
- Residence coverage for a casualty from fire, lightning, burst pipes, flooding, and wind
- Additional structures coverage for outbuildings and garages
- Landlord liability insurance
You can usually select a standard policy depending upon your insurance company, and you can select the best-mentioned items or a more extensive policy with coverage for additional hazards.