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Helps cover the physical property of your rental investment
Helps cover medical and legal expenses resulting from accidents on your property.
Provides temporary rental reimbursement should your property become inhabitable.
Larger homes often require more resources to repair or rebuild following a loss.
A property with high market value will likely cost more to insure since it costs more to repair and replace.
Older and poorly maintained properties are typically more complex to repair since necessary parts might be hard to find. Older homes might also require more repairs to be brought up to current code.
Short-term monthly leases might attract tenants that are less concerned about the property’s upkeep and more likely to cause damage than long-term tenants.
A property located in an area known for frequent incidents of burglary, arson, and other crimes presents an increased risk of claims for insurers.
Properties located in areas that are prone to natural disasters like wildfires and hurricanes experience more frequent and significant damages.
Landlord insurance policies usually have a set maximum amount of coverage per event or per year. While choosing a higher maximum may provide greater coverage, it will come at a higher price point.
Insurance add-ons, such as guaranteed income, flood, and emergency coverage, can drive up the overall cost of your landlord insurance.
Repairs or replacements of appliances will likely need to be paid for out of pocket—although there may be some exceptions—or covered by a home warranty policy.
Landlord insurance policies are usually designed for non-owner-occupied properties. So, if you live on the property and rent out a room or another floor to a tenant, your policy may have restrictions.
Your landlord insurance policy most likely won’t provide protection for your tenants’ personal possessions. As such, tenants should be encouraged to purchase their own renters insurance policy.
Landlord insurance is specifically designed to provide coverage for property investors with rental units. Homeowners insurance provides property coverage for private residencies where the policyholder resides on the property. In addition, homeowners insurance doesn’t provide landlords with property protection, liability protection and loss of rental income coverage.
In general, landlord insurance costs more than homeowners insurance due to the increased risks associated with tenant-occupied properties. While homeowners are only responsible for their home and its content, landlords are responsible for their property and any damage sustained while renting to guests or tenants.
Landlord insurance isn’t required by law. However, most lenders do require landlord insurance before closing. As such, property owners should strongly consider purchasing a policy to protect themselves against financial and legal risks.
The specific amount of landlord insurance coverage needed varies from property to property. However, there are a few factors to consider when deciding how much insurance you need, such as how much it would cost to replace the rental structure following a loss.
In general, most insurers have multi-property coverage available for real estate investors with more than four properties.
As a landlord, public liability insurance can protect you from lawsuits brought forth by tenants, their guests, trade or service providers, and intruders who might be injured while trespassing on your property.
An umbrella insurance policy can provide additional liability coverage for unexpected expenses. This type of policy can be especially beneficial as a landlord because it can cover costs and protect your assets if you are sued by a third party and found at fault.