If you are renting out a home you own as another stream of income, you have probably put some effort into attracting and vetting potential tenants, but there is another important consideration that could make the difference between a lucrative endeavor and a costly one: insurance. A landlord insurance policy is designed to protect those who rent out homes they own from financial losses with property and liability coverage.
A standard homeowners insurance policy only covers owner-occupied homes, which means it will not be in effect if you rent out your home to someone else. What happens if your property is vandalized or damaged during bad weather? When you consider all that can go wrong at a dwelling, it makes sense to have the best landlord insurance coverage you can afford.
What Does Landlord Insurance Cover?
Landlord insurance typically covers the physical property of the home you are renting to tenants. It will cover the home itself and any detached structures on the property, such as garages or fences, in the case of damage from fire, wind, lightning, and other losses. It can also cover personal property that you leave on site to maintain the property, like a lawn mower.
There is also liability protection, which can help to cover another person’s medical bills or your own legal expenses should someone be injured on your property and you are determined to be at fault. This might be the case with a slip or a fall down poorly maintained stairs, for example.
If your rental property incurs damage from a covered loss that prevents you from renting it out for a period of time, many policies will reimburse the income that is lost while it is unlivable. For example, if there is damage from a storm or fire and your tenant needs to move out while it is repaired, loss-of-use coverage would cover their rent.
What Does Landlord Insurance Not Cover?
Landlord insurance will not cover your tenants’ belongings, such as furniture, electronics, cars or other valuables. That is why it is a good idea to encourage tenants to get renters insurance.
In addition, basic landlord insurance will not cover repairs, such as the cost of fixing a broken air conditioning or refrigerator.
Additional Coverage Options
A standard landlord insurance policy is a great start, but there are some additional coverage options you might want to consider depending on your property type and its location.
If your rental property is in an area where vandalism is a concern, consider optional vandalism coverage to pay for the damage as this does not usually fall under a traditional landlord policy.
Although general landlord insurance policies may cover repairs to your home if there is damage during a burglary, it will not replace the items that are stolen. Consider burglary coverage to help with these potential losses.
Rental Property Under Construction
If you have bought a fixer-upper that is not quite ready for tenants to move in, consider coverage that will protect the structure while it is undergoing renovations until it is habitable.
Speak To The Personal Insurance Brokers
If you are ready to learn more about how to protect your investment in your rental property with landlord insurance, get in touch with the friendly and experienced personal insurance brokers at Merchant Family Agency today. Please give us a call at 407.707.6418 or request a quote online today.