THE MOST IMPORTANT CLAUSES IN A RENTAL PROPERTY INSURANCE POLICY

Rental property insurance is a must have for most landlords. It will provide you with the protection you need to safeguard your investment. Landlord insurance will provide an ample amount of coverage just in case you need it. 

Understanding Landlord Insurance and Why It’s Different from a Homeowner’s Insurance Policy

Although they are very similar home insurance policies, homeowners insurance and landlord insurance are different policies. One will provide protection for the homes you rent out and the other will safeguard your primary residence. Homeowners insurance can also help for a second home or vacation home. 

Rental property insurance is a policy that will cover the homes you have tenants in. Landlord insurance is made up of different parts and protections. It is designed to protect your rental property. Rental property insurance will cover you for the risks you may run into as a landlord. It will cover you in ways homeowners insurance won’t. 

Important Clauses in a Landlord Insurance Policy

If you’re a landlord with rental property and tenants it’s important you know a little about what’s in your policy. Knowing what can prevent your from losing money, tenants or your property are important. Below are some of the most important clauses in a rental property insurance policy.

Dwelling coverage:

One of the most basic forms of coverage in a landlord insurance policy is dwelling coverage. It will protect the dwelling and costs due to structural damage. This may include issues with plumbing, a gas system, pipes, cables, fixtures, appliances, and fittings. It’s always a good idea to look into guaranteed replacement cost coverage. This will help to pay to replace the property, or rebuild it. 

Water / Flood coverage:

If you believe you need coverage for flood damage there’s a very good chance you’ll need to purchase extended coverage. This extended coverage will protect you from water damage related to flooding. It can also help to protect the items you have inside the building. Flood insurance will be needed if you need protection against rain, floods, rain damage, sewer backups, and hurricane related water damage. 

Personal property coverage:

This portion of your landlord insurance is essential if you have tenants and are renting out a home that’s furnished and well equip. You may have tenants that would like to receive a home unfurnished and there are others that like the turn key rental. This part of your coverage will protect carpets, curtains, appliances, electronics, home goods, light fixtures and more. 

Coverage for acts of nature:

Acts of nature such as a hurricane, tornado, or earthquake. There are some rental property insurance policies that may not include this coverage. It will be important for you to ask your agent if you’re protected for these risks. This is even more important if you live in an area that is prone to natural disasters. Most standard homeowners insurance policies will not provide this coverage.

Fair rental income protection:

This portion of your coverage is also known as loss of income insurance. It will allow you to collect lost rental income if your tenant is unable to use the home. The majority of standard landlord insurance policies will not cover you if damage forces your tenant to relocate due to a covered peril. 

Legal, liability and medical coverage:

If one of your tenants, an employee, or a contractor sues you for damages this particular portion of your policy may help you from having to pay everything out of pocket. As a landlord it is very easy to start stacking up large bills for legal and medical fees. With these types of policies there are often no limits. 

Rental property insurance quote

If you would like a custom landlord insurance quote or have additional questions regarding rental property insurance, please contact us today at 916 313 6100