Rental property insurance, also called landlord insurance, covers the unique risks taken in renting out your home or condo for long periods of time. These policies include coverage for the structure, liability insurance protection and loss of rental income for landlords renting their property. Whether you are renting a house, a vacation home or an investment property to others, rental property insurance is an important safeguard against the financial risk associated with tenants living on your property.
What Does Rental Property Insurance Cover?
Rental property insurance coverage will vary from company to company, but policies will generally cover the dwelling, liability protection and loss of rental income. Many features of a landlord insurance policy are similar to a homeowners insurance policy, however, there is a cost savings for the landlord due to policy coverage differences.
Rental property insurance covers physical damage to the structure of the home itself. For example, it will cover damage to your walls and roof but not personal items of your tenant. Coverage will only extend to damage caused by a covered peril, and you should make sure to understand what type of perils are covered by your individual policy.
Coverage For the Landlord’s Personal Property
Unlike renters insurance, rental property insurance does not cover the personal property of tenants inhabiting the property. However, these policies can include coverage for items left onsite by the landlord. For example, if you left a lawnmower at your rental house and it is damaged by a fire, damage to the machine would be covered. On the other hand, if your tenant bought a personal air conditioning unit that is damaged by the same fire, the AC unit and the rest of the tenant’s property would not be covered by your rental property insurance.
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Liability coverage will protect you from the legal and medical costs associated with someone being injured on your rental property. If your tenant or a visitor is injured on your property, and you are deemed responsible for the injury, rental property insurance can cover these costs up to your policy limits. If you’re someone for whom the limits of this coverage are not sufficient to cover potential liabilities and you wish to increase your coverage, you could also purchase umbrella insurance for your rental property.
Loss of Rent Coverage
This coverage offers security against loss of rent payments if, because of a covered peril, the property you rent is uninhabitable due to damage from a covered loss. For instance, if fires are protected by your policy and fire damage makes your apartment unlivable, you are covered by rental income protection for the rental payments that your renters are no longer required to pay. In general, coverage will extend to a specified period of time, such as 12 months. Loss of rental income does not always come standard with rental property insurance, so you should check your policy before purchasing it if this type of coverage is important to you.
- Vandalism coverage: This usually covers deliberate physical damage to the home.
- Ordinance or law coverage: This covers a loss of value or costs associated with enforcing local laws surrounding the repair of property caused by an insured loss. Make sure you include this protection.
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PS Here’s a few words from one client that trusts Stromsoe Insurance Agency:
“Stromsoe Insurance is a reliable agency, it has provided fast and excellent service and made the process of finding the best homeowners insurance for our home.”
Betty Harrington – Murrieta, CA – Client Since 2014
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