Landlord Insurance Explained
As an owner of rental property, (examples include single family homes, condos, etc.), in which there is a paying tenant, then most likely you would greatly enjoy the substantial peace of mind that comes with good landlord insurance.
What is this Coverage?
It is a specialized type of coverage that is designed to protect property owners from losses that are inherent in owning rental property. It is not, however, normally available if one intends to live in the home or unit with the renter. This kind of coverage will normally protect the building’s structure along with providing liability coverage and repair or replacement help for the landlord policyholder.
There are other options that are available with some policy offerings, such as personal property coverage for the landlord’s personal items that are utilized by tenants. (Note that this coverage will not cover the tenant’s personal items as this is the purpose of renter’s insurance.) It is important to know that lenders will most likely mandate you to carry this kind of coverage and to also keep it in effect for the life of the mortgage loan. However, even if one does not have a mortgage to pay, any landlord would be wise to seriously ponder the potential financial benefits that can come from having good landlord insurance protection.
How It Works
The way this coverage functions helps a landlord when he or she has some kind of damage to the covered property. If this occurs, then a claim can be filed to recover financially from loss that is due to any losses or damages, whether inside or outside of a covered building. This can include flooding from plumbing problems, a roof needing replacement or repair due to severe storms and other various covered events or accidents. When a claim is filed, the landlord pays the agreed upon deductible before compensation can be issued. The insurance provider pays the balance of costs, up to the policy limit. If the stated policy limits are reached then repairs need to be covered out of pocket.
Ways to Save
Often times the insurance provider will offer lower premiums in exchange for higher deductible payments. Other ways to save include making improvements to the property, like installing high quality locks on doors, putting in fire alarm systems and so on. (Each insurance company will have its own kinds of credits and discounts available.)