Landlord Insurance – Protection You Need
Are you a landlord? If you are, then you need to have landlord insurance!
Now that we’ve said that, let’s start at the beginning. Landlords are people who own properties that they rent out. They could be annual rentals, or vacation rentals. Any dwelling you own that you collect money for qualifies you as a landlord.
Don’t confuse your personal homeowner’s insurance with landlord insurance. They are completely different. Your homeowner’s insurance protects your home but does not cross over and cover your rentals in entirety. You need specific insurance for your rentals. Bottom line is that your homeowner’s policy may not be sufficient for your needs as homeowner policies are meant to cover the dwelling you are living in. Your homeowner’s policy may offer additional coverage for vacation homes, but it is still lacking in landlord-specific needs.
Your rental property or vacation home is an important investment that you want to protect. That’s where landlord insurance comes into the picture. It will cover things that your homeowner’s policy won’t, such as legal costs in case a tenant decides to sue you and rental income replacement if the dwelling becomes uninhabitable. It also offers special options like emergency appliance repair cost. Bear in mind that these policies generally won’t cover flood damage. You’ll want to talk to your insurance agent about flood and hurricane coverage.
In general, landlord insurance will cover liability. This includes personal injury coverage and legal counsel. Some optional coverage includes:
- Emergency repair service – this covers critical appliances like hot water heaters, A/C, etc.
- Emergency lock replacement
- Contents coverage – this includes items you, as the landlord, own such as furniture, carpets, curtains, etc. This extra coverage is important if you rent a furnished home. Note: it does NOT cover tenant possessions.
Landlord insurance can get costly. Talk with your insurance agent about things that may help lower your premium. Things like burglar alarms and sprinkler systems which add to the safety of the dwelling can help reduce the premium. Even requiring that tenants be non-smokers and requiring tenants to purchase renter’s insurance can help. And if you rent multiple homes, or units as in a duplex, condo, or apartment building, you will want to talk to your insurance agent about umbrella policies that would help you protect your investment in case of disaster.
When don’t you necessarily need to purchase landlord insurance? There are instances where it may not be necessary. For example, if you let friends use your vacation home for a couple of weeks, or rent out a room in your home to a student, etc. Again, talk with your insurance agent to discuss all situations.
And there’s good news too! Being a landlord means you are running a business and the landlord insurance is a business tax deductible item. There are many other deductions related to being a landlord. Talk with your insurance agent who will guide you and advise you to ensure that you and your rentals are protected.
This information is not intended to be exhaustive nor should any discussion or opinions be construed as professional advice. Should you have any questions or would like to discuss your risk exposure with your landlord insurance, please contact the insurance pros at ARCW Insurance. We are here to help.