Most property owners should have landlord insurance. It helps in reducing the maintenance cost, especially for emergencies on the property. The essence of taking an insurance cover is to cushion a property owner in case of a loss directly linked to the policy adopted. For landlords, unplanned danger like fire and mechanical damage of the property or any other insurable factor can cause a loss that should be recovered.
What does comprehensive landlord insurance protect?
A good landlord insurance policy protects you against three risks as follows:
• Loss of income
Your rented property is a source of income from the rent being paid. However, your tenant might end up not paying rent due to the condition of the property. For instance, if the property is adversely infested with mold or termites, the tenant might opt not to pay. Alternatively, if the property is so damaged that the tenant is forced to vacate to give room for repair, your income will be cut. The property owner is, therefore, compensated in the value of the monthly rent.
• Property loss or damage
The landlord insurance policy protects you in the event that a rented property gets exposed to a disaster like fire, earthquake, or any other risk that would devalue it to zero. Your insurance company will as well repair the property of any damage caused by the tenant.
When taking such an insurance cover, you should look for a policy that will be flexible to pay back your claim on an agreed replacement value of the property.
Landlord insurance covers the legal and medical costs that result from the condition of the property against the tenant. For instance, if rodents inhabit the property and harm the tenant, the policy covers the medical bills for the tenant.
Landlord insurance does not cover the following:
• Tenants unwilling to pay rent
In case your tenant decides not to pay rent because of a personal circumstance like their income being cut, the policy will not pay for this cost. You should create a good rapport with your tenants so that they become easy to deal with in paying their rent. Also, do not overcharge the cost of the lease so that the tenant feels burdened.
• Landlord insurance does not cover renter’s property.
Your tenant should apply for renter’s insurance policy to cover their personal property while they rent your property. The landlord insurance policy does not cover them.
The cost of landlord insurance
There is no specific value of premium that you will be expected to pay. The amount depends on the particular insurance company. It also depends on the risks in which you want to be insured. Rare hazards like earthquakes might be less costly than common dangers like fire.
Always get in touch with your insurer to give you the right advice. The loss must be directly linked to the risk insured. If you choose to indwell your property, you might not be paid for any claim even if the loss has resulted from the insured risk.
To assess your landlord insurance coverage and ensure you are protected, contact us at 772-287-3625