What Does Landlord Insurance Actually Cover: Must Read

by | Apr 27, 2021

There is fair argument that Landlords should protect themselves and their property investments with landlord insurance if they decide on renting out their property.

Before you can decide on whether or not to get landlord insurance, you need to know what landlord insurance actually covers.

A property is a huge investment, you should be taking every opportunity to mitigate risk and maximising the potential reward.

Knowing what landlord insurance can cover is essential to be able to evaluate what kind of coverage is best suited to protect your investment.

Rent Loss

Imagine if your tenant isn’t able to pay his or her rent because they lost their job.

This can leave you in a very tricky spot, and no matter how perfect the tenant was, it could potentially happen to anybody.

The screening process for tenants could be top-notch; you could still end up with a significant cash flow headache because your tenant is unable to pay rent.

Most landlords have mortgage payments to think about. How do you plan on paying your mortgage when there is no cash from rent coming in?

This is where Fair Rental Income Protection insurance policies come in handy, including covering loss of rent incurred from an event like a fire and your rented property is now vacant pending repairs.

Property Damage

This insurance policy is designed to cover damages to your rented property. It includes the following:

Dwelling

You are compensated for damages caused to your property by natural events like lightning, hail, storms, and wind.

Landlords are also covered for losses caused by a fire or accidental destruction of property by the tenant.

Other Structures

Detached property like fences and garages are covered in your insurance plan from damages caused by natural or human factors.

Personal Property

A landlord’s personal items that a tenant is utilizing are also covered—for instance, a lawnmower or a snowblower.

Property Theft

It is always a wise endeavor to insure your property from theft via burglary.

While standard landlord insurance cover property damaged by a break-in, they probably won’t cover the losses incurred by items stolen.

Property theft is usually an add-on in your landlord insurance policy that I definitely recommend.

Liability Protection

Liability protection covers landlords from lawsuits that are decided against them.

This sort of insurance coverage is sadly overlooked but is highly essential in today’s day and age.

No matter how airtight your rental/lease agreement may be, there is always a chance that a judge or a tribunal rules against you in a court of law.

It could be caused by an injury on your property, or a safety regulation overlooked that might cause a lawsuit against you.

So it is highly recommended to investigate liability protection.

Vandalism

If an outsider vandalises your property, it won’t be covered by your standard property damage insurance coverage.

Getting specific coverage for vandalism can help you cover losses caused by graffiti or random acts of destruction on your property.

Rental Property Under Construction

If you are upgrading your property or giving it mandatory repairs, this insurance coverage aims to help protect the structure until it’s ready to be occupied.

Building Codes

New building codes are upgraded all the time, and chances are that when your property was constructed, it did not adhere to the latest building codes released recently.

If your building is being extensively renovated, you might be forced to adhere to the newly updated building codes.

This results in an extra cost that most landlords aren’t anticipating.

This insurance covers any such loss caused by recent updates on building codes.

Choose the Right Insurance Company

It is essential to choose a reliable insurance company that settles your claims quickly.

Go for a well-renowned company instead of focusing on the price.

Always understand exactly what is covered under your insurance policy in detail before purchasing your insurance plan.

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