Landlord Insurance for Rental Property- A Useful Guide

By: Abdullah Haroon June 19, 2020

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You have already taken a bold decision of investing your money in property and to save your money and make extra money. The idea of becoming a landlord is definitely rewarding but there runs a possible risk along with renting your property. To minimize the risk involved in your investment, you’ll want to ensure your financial interests are protected

This is precisely why rental insurance is a convincing option. Let’s find it out with more detail down the page.

What does landlord insurance mean?

To put it in few words, landlord insurance includes coverage for owners of rental properties is it a studio, condo, or multi-bed apartments. The chief benefit of landlord insurance is to protect you from the repairing expenses to your rental properties. Apart from the general coverage like damage to the building, you can tailor it according to your requirements by applying to furnishings and appliances within those structures.

However, the belongings of the tenant in that property are not incorporated in landlords’ insurance. Renters have to have their separate rental insurance for the coverage of their belongings.

In addition to it, as a landlord, it goes in your best interest to include your Landlord policy for Loss of Rent, in case the property is uninhabited due to certain bad incidents. It will save you from losing the money if that happens.

Is the landlord insurance for your benefit?

In case you’re renting out your property, you are required to have landlord insurance to have some security. Landlord insurance can make sure that you save yourself against possible damage to your properties.

Another reason to consider landlord insurance is that if you have planned on taking a mortgage to buy a property to then rent out; mortgage lenders often ask for the proof that the rental property is fully insured and protected before they will consider issuing you a loan.

Read Also: What are The Tax Benefits of Owning a Home?

If that is the case, you shall work it out beforehand by asking the lenders their requirements and with the consultation of the insurance company agents for guidance and information. It is likely to convince the mortgage lender in the issue you the money.

The stark difference between Homeowners Insurance and Landlord Insurance:

You might have considered both the same while they are not. Homeowners insurance covers both your property and the people and belongings within it, while landlord insurance essentially has coverage for the structure of your property. You can incorporate extra coverage to protect your household accessories such as kitchen appliances placed on the property, as well.

However, you shall ask your tenant to have their rental insurance policy to protect their belongings. How much is enough for landlord insurance?

The exact amount of coverage may vary depending on the area of your apartment, the estimated expense to do the repairing work.

The point to ponder is that every rental property presents a unique set of risks, and therefore, the insurance agent can assist you to weigh your needs and your budget to determine the right amount of coverage and educate you about the essential features for you.

The chief factor in determining your rental insurance premium will be how much the property would cost to rebuild or replace.

What does landlord insurance coverage include?

The rental property insurance policies generally incorporate coverage of personal stuff. The final decision rests with you whether to take the flagship program which covers everything or to keep it at a minimum level.

The steps to buying landlord insurance:

You are required to reach out to any insurance firm that particularly extends landlord or rental property insurance, as not all companies exhibit such policies. Consider those firms which place more tailored policy options according to your specifications to make the space for the possible change in structures or number of tenants. This will keep the window open for you if you plan to expend the structure in the future.

An additional tip is to try and get more than one quotations of insurance. Chances are someone who is willing to adjust their policy to give you the most benefit.

Because of neck to neck competition among companies, they try it hard to convince the client to their policy. If you are good at negotiations, you can play that point to your benefit.

Draw a comparison between the different policies. When you reach a conclusion about any policy, you need to talk to the company and ask for the exact cost along with covered liabilities.

The bottom line:

By now, you have a deep insight and a good idea of all the merits and demerits of the landlord insurance. To be honest, apart from adding a certain amount in your expenditure, there are no demerits.  Therefore, the merits outweigh the demerits with good proportions. Above all, the paramount advantage is that you will not have to worry about the after-effects of any unfortunate incident at your property.  The peace of mind is what you would have expected while investing your money in the first place. Without giving it a second thought, get good insurance coverage, now.