When you become a landlord, you assume greater risks than the average homeowner does, which is why you need landlord insurance to protect you and your investment. Also known as rental property insurance, this coverage is designed specifically for landlords to give them the protection they need for their rental properties. To find out about what exactly landlord insurance covers and how it is different from home insurance, keep reading below.
Items Covered by Landlord Insurance
Landlord insurance protects your building as well as personal belongings within your rental units such as appliances or furniture that you own. Depending on the policy, it may also include loss of rental income should your tenants need to move out following a claimable event such as a fire. Although every policy can have different coverage, landlord insurance typically covers the following:
- Malicious damage to your property caused by tenants
- Malicious damage to your possessions caused by tenants
- Theft of personal possessions from your rental unit
- Loss of rental income arising from a covered claim
- Damage to property or personal possessions resulting from covered natural disasters or vandalism
- Liability coverage in case a tenant or visitor is injured on your property
How Much Liability Should Landlords Have?
As a landlord, you will want to have more third-party liability coverage on your rental property than the average homeowner would for their personal residence. Because you cannot control your tenants and their guests, if an accident happened in your rental unit or someone becomes injured, you may be faced with an expensive lawsuit. If you have anything on your property that could increase the chances of an accident or injury occurring, such as a pool, you should consider an even higher liability limit.
Choosing a higher liability limit is probably more affordable than you think. An experienced advisor at Bow Valley Insurance can compare the specifics of different coverage options from a number of insurance providers and help you find a policy that will suit your needs for the lowest rate possible.
What is Not Covered by Landlord Insurance?
While your landlord insurance will cover your property and provide liability coverage, there are a number of items that are not covered, including:
Equipment Breakdowns or Maintenance: If the furnace or fridge in your building breaks, you will probably have to pay out of pocket to replace or repair, unless the product is still covered by a manufacturer warranty.
Tenants Property: Your landlord insurance will not cover the personal possessions of your tenants. It is recommended that you ask your tenants to purchase their own renters’ insurance prior to signing a lease agreement so that if their belongings are damaged by a covered event, they will not have to pay out of pocket to replace.
For more information on insuring your rental property and protecting yourself as a landlord, contact an experienced professional at Bow Valley Insurance for a free, no-obligation quote.