04 May Landlord Insurance
Transitioning from a homeowner to a landlord is exciting but there are a lot of things you need to know in order to make this transition. One of the most important things you can do to protect yourself and your property is to get the right landlord insurance policy. Landlord insurance is very different from homeowners insurance. Landlord insurance protects you from potential loss but also provides reimbursement in the case of lost rent or property. There are several different types of insurance you can and should get as a landlord.
Contents
Property Protection
Also known as dwelling coverage. This type of policy covers damage to the house from the elements such as hail, snow, fire, lighting and other natural occurrences. However, there are certain acts of nature that are not covered and would have to be added as a separate policy. Things like earthquakes, hurricanes and tornadoes are not typically covered under a basic property protection policy. If you live in a high risk area, it’s a good idea to add this protection. In addition, floods are not covered under these policies. Flood protection has to be purchased though the national flood insurance program.
Personal Property Protection
This policy covers the landlords property that has been left at the dwelling; kitchen appliances, washers and dryers. The tenants property is not covered under this policy. Landlords can require tenants through the lease agreement to get renters insurance and that will cover their property. One thing to keep in mind is the different types of coverage there are. The cash value policy will pay you the value of the lost property. For example if you purchased a new refrigerator for $800 two years ago and it got damaged in a fire, the cash value policy will determine the value of the refrigerator after the two years and pay you that value. A replacement cost policy will pay the cost to replace the refrigerator and not take the depreciation into consideration.
Liability insurance
This policy covers legal fees and medical expenses if someone is injured on your property due to negligence. For example, if someone falls on icy sidewalks that haven’t been properly maintained liability insurance would cover the fees.
Rent Loss Protection
This policy covers you if there is rent loss due to the property becoming uninhabitable. Whatever rent you would have made in rent will be paid to you.
There are several factors that can affect the cost and which type of policy to get. Consider your properties location and known risks in the area, the size of your property, if you have fire sprinklers and burglar alarms. There are so many factors that can affect your policy so determining which policies to get and what to cover can be overwhelming. Talk with your real estate agent or property manager to make sure you are getting the proper coverage for your property. It is important to get quotes from several companies to get the best rate as well. This is a great place to start when looking for the best policies for landlord insurance The 8 Best Landlord Insurance Policies of 2020
