A Short Guide to Landlord Insurance

Some landlords, particularly the beginners renting out their property, will generally assume that they are covered with their residential insurance in times of a damaging event, accident, or disaster. There is a good chance that your existing policy will only cover the home that the owner occupies. The insurance policy will no longer apply when you start renting out your property to other people. Since the renter will not be responsible if there is an accident or appliance malfunction, you as the owner will be liable for all the cost and the claims. This is why it is essential to have landlord insurance.

 

The Provisions of Landlord Insurance

 

A comprehensive and good Landlord Insurance coverage will mainly include different levels of protection such as the following:

 

·         Liability Protection- This is the coverage intended for the legal or medical expenses if the tenant or a guest acquired an injury due to issues like architectural damage, icy walkways, and others.

 

·         Rental Default- On the off chance that an unfortunate event occurs that makes your rental property uninhabitable, like a sinkhole, rat, termite, or mold infestation, this will provide a temporary reimbursement that will cover the lost rental income.

 

·         Property Damage- This landlord insurance coverage is intended for your furnishing and real estate property if they suffer damage due to irresponsible tenants, vandalism, earthquake, appliance malfunction, fire, and natural disasters.

 

There are also instances that the Landlord Insurance will come with supplemental coverage. These are not as vital as the provisions mentioned above, but they can also be essential if you want to save some cash. It may include emergency coverage, flood, and guaranteed income policy.

 

How Much Does it Cost?

 

On the latest study, the average cost of home insurance is around $800-$1,000. Unfortunately, this is only a fraction of the cost of Landlord Insurance since rental properties tend to acquire more damages. You should expect to pay at least 20% for this coverage. There is also a relationship between the time that the property is in rental service and the cost of the premiums. You should expect to pay higher premiums when you rent your property for 12 weeks rather than for the entire year. It is probably because short-term tenants will less likely notice the maintenance issues. They do not thoroughly understand the property's layout, such as the electrical wiring and the load-bearing.

 

When you are looking for Landlord Insurance, make sure to ask your insurance provider about the bundle option. If you choose to buy both insurances from the same agency, you will likely receive a discount. Read the details and provisions carefully before affixing your signature on the contract.

 

Before deciding to rent out your property, make sure to analyze your home insurance coverage. Do not readily assume that it will cover your liabilities and damages. If you want to rent it out, having Landlord Insurance is definitely a must.