What does What does landlord insurance cover?
Landlord insurance is a policy for someone who rents a home they own. This type of insurance generally includes two different types of coverage: property protection and liability protection.
Both coverages are intended to help protect you, the landlord, from financial loss.
PROTECTION OF THE LANDLORD’S PROPERTY
The property protection in a landlord insurance policy generally helps cover physical property related to the home you’re renting.
This may include the home itself and the equipment in place to help maintain it. Coverage generally includes:
Housing
This coverage helps pay to repair your rental home, condo, or apartment if it is damaged by fire, lightning, wind, hail, or other covered losses.
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Other Structures
This part of your policy helps pay to repair free-standing structures on your rental property, like a garage or fence, if they are damaged by a covered loss.
Personal property used for rental service
If you leave a lawn mower or snow blower on site to maintain your rental property, your landlo insurance may help cover this equipment if it is damaged.
However, if you leave your personal bike or DVD player in the house you rent, it probably won’t be covered by your landlord’s policy.
All types of coverage listed above are subject to the deductibles and limits set forth in your specific landlord policy.
Your deductible is the amount you’ll pay for a covered loss before your landlord insurance kicks in. A limit is the maximum amount your policy will pay after a covered loss.
Each coverage generally has its own separate deductible and limit. You can set your own deductible and limit amount for these coverages.
LANDLORD LIABILITY PROTECTION
The liability portion of a landlord insurance policy can help you pay someone else’s medical bills or your legal expenses if someone else is injured on your rental property and you are found liable.
For example, if your tenant falls down the stairs at your rental property and a court finds that you failed to maintain the stairs and/or railing, you could be liable for the tenant’s medical, legal and other costs.
In that case, landlord liability coverage can help pay those costs, up to your policy limits. Generally, you will not pay a deductible for a liability claim.
ADDITIONAL LANDLORD COVERAGES TO CONSIDER
Depending on the neighborhood, geographic area, or condition of your rental, you may want to consider adding some optional coverages to your landlord’s policy. These coverages may include:
Vandalism
You may want optional coverage to help pay to repair vandalism damage.
If your property is vandalized, that type of damage is generally not covered by a traditional landlord’s policy unless you purchase vandalism coverage.
Theft
Although a standard landlord insurance policy can help pay to repair your home if it’s damaged in a burglary, it generally won’t pay to replace stolen items.
Optional coverage may be available for theft of items you keep on the property to help maintain it, such as appliances or a lawnmower.
Rental Property Under Construction
Are you demolishing the interior or renovating your rental property or building a new home? You may be able to purchase additional coverage to help protect the structure until it is ready for occupancy.
Building codes
If you’re repairing or replacing part of your rental property after it’s been damaged, you may be legally required to update things like wiring or ventilation, says the International Institute for Risk Management.
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This is because city or county codes may have changed since your property was originally built. This coverage can help reimburse you for these additional costs.
Talk to your local agent to learn what optional coverages may be available and to help understand how they can help protect you as a landlord.
WHAT IS NOT GENERALLY COVERED BY LANDLORD INSURANCE?
Although landlord insurance can help pay for expenses arising from a number of sudden and accidental losses, you’ll likely find that some things are excluded from the policy’s coverage.
A landlord’s policy may not cover:
- Equipment Maintenance and Breakdowns
If your rental property’s oven or dishwasher breaks, you may have to pay out of pocket for necessary repairs or replacements. - Shared Property
If you live in the property and rent a room or another floor to a tenant, you’re typically not eligible for a landlord’s policy, according to the National Association of Insurance Commissioners.
Landlord policies are designed for “non-owner-occupied” properties.
Talk to your insurer about whether you can add coverage to your homeowners policy for the section of your property you’re renting.
Renters’ belongings Landlord insurance generally does not cover your tenant’s personal possessions (electronics, clothing, etc.).
For that protection, your renters will need to purchase their own renters insurance policy . Some landlords require tenants to show proof of renters insurance before approving your rental agreement.
This helps renters pay to repair or replace their personal belongings, like furniture and clothing, if they are damaged by a covered peril, like fire or theft.
Do I need home insurance or landlord insurance?
Suppose you have a house that you want to rent full time. What type of insurance do you need to protect your property when you have renters? You will most likely need a landlord’s policy .
If your plan is to have tenants sporadically, home insurance may be better suited to your needs. Here are some factors that can help you determine which type of insurance is right for your situation.
DURATION OF THE RENTAL CONTRACT
If you’re planning to temporarily rent your home for a one-time only (probably for a sporting event in your city, for example) then your homeowners policy may provide you with protection;
mentions the Insurance Information Institute. A homeowner’s insurance policy can help cover damage from certain perils, like fire or theft, if you occasionally rent your home.
However, you may not be able to buy homeowners insurance if you don’t live in the property.
A local agent can help you understand what kinds of scenarios may or may not be covered by homeowners insurance when you rent your home to renters.
If you are planning to rent your house (or a second home/property) in a traditional way, then you are a candidate for landlord insurance, mention III;
since the homeowners policy does not protect you in this scenario.
HOMEOWNERS INSURANCE AND LANDLORD INSURANCE
Like a homeowner’s policy, a landlord’s insurance policy generally helps protect the building (and other structures on your property , like fences or sheds) from damage from fire, lightning, wind, hail;
and other covered losses. To buy home insurance, you need to live in the house. If you plan to rent it to other tenants, you need landlord insurance.
Homeowners insurance may offer coverage if you live in a single family home and rent out one of the rooms to tenants, depending on the number of people renting or how long they stay in your home.
Coverage varies by insurer or policy, so check with your agent before renting a room in your home. If you plan to lease your entire home to renters, you’ll need landlord insurance.
Other key differences between home and landlord insurance are:
Personal Property Coverage. Although homeowners insurance can help protect many of your belongings, such as furniture, clothing and computers;
landlord’s insurance generally only provides coverage for items used to maintain the rental property.
So if you leave personal belongings behind that are not used to maintain the rental property, landlord’s insurance may not protect them.
However, it can help you cover items such as snowplows or lawnmowers that are stored on site and help maintain the property.
Liability coverage . Landlord’s insurance generally provides liability coverage related to tenants’ premises only.
If a tenant is injured in your rental home and you’re found legally responsible, your homeowners policy’s liability coverage can help cover medical expenses and legal fees.
Meanwhile, the liability portion of a homeowners policy typically covers you and family members who live with you in the home, whether the accident occurs in the home or not.
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HOW RENTERS INSURANCE AFFECTS YOUR RENTERS
Neither landlord’s insurance nor home insurance will protect your renter’s personal items. That’s why you may want to make your renters insurance a condition of your lease.
Renters insurance can help protect your tenant’s personal property and also provide them with some liability protection.
It’s a good idea to think about the risk involved in inviting paying guests to your home –
read your policy or contact your local agent to make sure you have the right coverages before welcoming renters for any length of time .
