Landlord and Rental Property Insurance

Rental Property Insurance Basics

If you’re going to rent out a room, an apartment, a condo, a house or are planning on receiving rental income, landlord insurance is something you’ll want to look into. With such a large investment you’ll want to have some sort of protection on it. Homeowners insurance just doesn’t provide the coverage you’ll need if the worst was to happen by way of your tenants.

The fact that rental properties are occupied by tenants makes them much more risky to insure. Due to this it’s best to carry landlord insurance to cover any potential damages. Because rental property insurance is looked at being riskier or more vulnerable to claims, the rates are are little higher than a standard homeowners insurance policy.

Landlord insurance also known as rental property insurance is designed to cover property that landlords rent out. It can be useful for one to four units or more. Landlord insurance will help to safeguard rental units from financial losses caused by property damage and liability.

Landlord Insurance for short-term rentals

If you rent out property for a short amount of time or long term it’s important to make that distinction when looking into policies.

Frequent renters:

If you own a property that is only occupied short term with renters that come and go, there is a good chance your property will be considered a place of business by most insurance providers.

Now if you have short term tenants that use your property such as a Airbnb which could carry its own insurance, it could be a good idea to purchase additional coverage like a commercial property insurance policy. These policies could cover homeshares and vacation rentals which will protect owners and landlords. The Airbnb coverage doesn’t protect damage or theft. It is usually included in every booking and includes $1 million in liability and property damage insurance.

Infrequent renters:

If you rent out your property less frequent and only have the occasional tenant you may have a less complicated decision. In some situations your homeowners insurance policy may cover you. This is still something you may want to consult one of our agents about. If it is not covered under your standard homeowners insurance policy you may want to ask your agent about endorsements or add ons to see if that’s a possibility to get the coverage you need.

Rental Property Insurance for long-term rentals

On the other hand if you have tenants that are more long term, around six months or longer, there’s a good chance you’ll need landlord insurance. Especially if you want to protect your investment from tenant damage. Another option would be dwelling rental protection, but you’ll want to speak to one of our agents to see which option is best for your lifestyle. If your rental property is destroyed or damage by a cover peril such as a fire, wind or smoke there is a good chance landlord insurance will cover you.

What does landlord insurance cover?

Your rental property insurance policy will cover a few basic and standard elements. Below we go over them:

Property damage:

One of the most important parts of your landlord insurance policy is protection for the property itself or the structure of the home. Various amounts of coverage and limits will depend on the type of policy it is.

Dwelling:

The structure of the home is protected if it is damaged by a covered loss like a fire or severe wind. Landlord insurance will help to repair or rebuild the home if the worst were to happen.

Other structures:

This portion of your coverage will protect structures that are not attached to the property such as fences, garages, gazebos and more.

Loss of use:

If your tenets are unable to use the home due to a covered peril, your rental property insurance may cover the lost rental income.