Owning a rental property creates an interesting insurance issue that was not solved until recently. With the advent of landlord insurance, now owners of these properties can be sure that their rented property is safe and covered where their homeowner’s policy does not do so.
What is Landlord Insurance?
This is a special form of insurance that is for people who own homes and properties that they actively rent out to others (their tenants) as a means of income. This type of insurance can also be used for investment properties that are not classified as the owner’s principal residents (where they live most of the year).
What do the Policies Cover?
The coverage that you can get from this insurance depends on several factors. There are several common forms of coverage for this insurance. One of these is comprehensive property coverage, which covers any unexpected or sudden losses due to damage to the property. There is also liability coverage that will cover a landlord for any accidents or damages to others that is found to be their fault. There are even specific types of coverage that will help to recover the lost revenues that a landlord might realize if the property becomes unlivable and the tenants do not pay their rent. All of these coverage options and more can be available depending on the insurance company the landlord goes through.
How does it Work?
Like all other types of insurance, a landlord must pay monthly premiums in order to receive the coverage. For larger companies that own hundreds of properties, these premiums may be mutually agreed upon and paid annually. If some form of damage occurs, the landlord must file a claim with the insurance company, and an adjuster will determine the amount to be paid to the landlord.
What is the Benefit of This Type of Policy?
This insurance provides peace of mind to an owner who does not live in their home. This insurance covers the property structures, as well as any owned property that tenants may be using (dishwashers, refrigerators, washers, etc.). This is also a great supplemental policy to have along with regular homeowner’s insurance. This insurance ensures that property that is impossible for a landlord to control is protected.