Landlord insurance protects people who rent out residential property from losses related to the rental activity. It’s intended for landlords who rent out homes, apartments, or condominiums, on an ongoing basis, not for occasional or one-time rentals.
Why It’s Important
A landlord policy covers damage to the property or associated items. It also provides protection against legal liability and loss of income.
Property damage protection covers the main building and any associated structures, such as a shed or fence. The insurance will pay for losses caused by fire, theft, storms, and vandalism. It also covers damage done by the tenant.
Property damage coverage also protects items that are used to service the property, such as a lawn mower and yard equipment you store on site.
Another important reason to get a landlord policy is for liability protection. If a tenant or visitor gets injured on the property and files a lawsuit against you, you could be exposed to paying the injured party’s medical bills and legal expenses. With a landlord policy, the insurance company takes on that risk instead.
Landlord policies also cover scenarios that cause loss of rental income. If the rental property becomes uninhabitable due to circumstances beyond your control, such as a fire or storm damage, the policy will compensate you for the lost income.
What Isn’t Covered
Some items are not covered by this insurance, even though they are stored at the rental property. Personal property that isn’t related to servicing the rental isn’t covered. This includes items such as furnishings, carpet, bicycles, and stored personal belongings.
Tenant belongings are not covered by this type of insurance either. It’s wise to suggest or require tenants purchase renter’s insurance to cover their personal possessions.
Landlord insurance isn’t mandated by law, but it’s a good thing to have to protect yourself from financial loss.