Landlord Coverage
Landlord insurance is designed for someone who rents out a residential property they own. Most homeowners insurance will not cover a dwelling that is not occupied by its owner, which is where landlord coverage comes in. It covers property damage, loss of income and liability protection. While it includes many of the same coverages as homeowners insurance, it offers landlord specific protection.
FAQs
What is covered by landlord insurance?
Most landlord coverage offers three main types of coverage: property, liability and loss of income. These coverages are designed to protect you, the landlord, from financial loss.
Property
This protects against physical damage and loss related to the dwelling you are renting to others. It can include the dwelling itself, other structures and personal property that is used to service the rental.
Dwelling refers to the rented home, apartment, condominium unit or townhouse you are renting out and protects against damage resulting from a covered cause of loss, like fire or lightning.
Other structures helps pay to repair detached structures on your rental property, like a garage, shed or fence.
Personal property used to service the rental can encompass many things, like a snow blower you keep onsite and use to maintain the rental property.
Liability
This can help cover the medical and legal costs associated with a tenant or visitor suffering injury on your property due to a property maintenance issue, like an icy walkway. For example, if one of your tenants falls down the stairs at your property and a court determines that your failure to maintain the property resulted in the tenant’s injuries, you would be responsible for your tenant’s medical, legal and other costs. Liability coverage can help cover these types of expenses.
Loss of rental income
If a covered cause of loss occurs that causes the property to be completely uninhabitable, like a vermin infestation or a sinkhole, this coverage can provide reimbursement for the money you’d otherwise receive from your tenants if they were able to occupy the property.
Additional coverages
Landlord insurance is highly customizable to meet your specific needs, and the insurance carrier will often offer several options. Below are some of the most frequently purchased landlord optional coverages.
- Tenant move back expenses refers to the moving expenses associated with having to temporarily move your tenant out of the property to complete repairs.
- Vandalism coverage helps pay to repair vandalism damage.
- Guaranteed income reimburses the landlord if the tenant doesn’t pay their rent in full or at all.
- Burglary can help pay for maintenance items you keep on the property, like a lawn mower, if they are stolen during a break-in.
- Emergency coverage is intended to help cover the costs to landlords associated with tenant emergencies. Perhaps they are accidentally locked out of the house and you have to drive across town to assist them.
- Rental property under construction may be available if you intend to renovate your existing rental dwelling, and offers coverage for the structure until it is ready to be occupied.
- Building ordinance or law can help cover the costs associated with bringing your dwelling up to code after it has been damaged. City and county codes change frequently and they are likely different than when the dwelling was first constructed.
- Non-occupied dwelling is designed to extend coverage if your property is vacant for more than 30 days.
What isn’t covered by landlord insurance?
Although landlord coverage can help protect you from many different sudden and accidental losses, each policy will contain exclusions. Below are some of the most common landlord coverage exclusions.
- Maintenance and equipment breakdown is typically excluded on landlord policies. If your dishwasher or dryer breaks down, you’ll need to cover the cost of repair or replacement.
- Shared property refers to a situation where you occupy part of your home and rent out a portion of the home to a tenant. Landlord policies are designed to cover non-owner-occupied property so you would need to see if you can add coverage for the partial rental to your homeowners policy.
- Tenant belongings are not covered by your landlord policy. Tenants will need to purchase their own renter’s insurance to cover their furniture, clothing and other personal items. Many landlords opt to require their tenants to have renter’s insurance coverage to ensure their personal property is protected.
What does landlord coverage cost?
The cost of landlord insurance can vary greatly depending on the coverages you select and your specific situation. When calculating landlord policy premiums, carriers will consider a variety of factors such as location of the rented property and the frequency of rental. Short term rental properties often have higher premiums than long term rental properties. Landlord insurance typically costs more than homeowners insurance due to the increased risk of damage and loss. You may be eligible for discounts if you bundle multiple coverages with the same carrier so be sure to inquire with you agent.