If you own a property that you rent out to others, getting landlord insurance is a wise move. These policies typically cover your dwelling property, liability and lost rental income.
We favored providers with extensive coverage options and excellent ratings from major credit rating agencies. They also must offer competitive rates and a wide selection of optional add-ons.
Liability Coverage
Landlords have a responsibility to keep their properties safe, which includes regular safety inspections and prompt maintenance work. But accidents happen, and if someone is injured or their possessions are damaged on your property, you could be held liable. Liability coverage in a landlord insurance policy can pay for compensation, expenses and legal fees up to the specified limit of your policy.
The location of your rental property may affect how much liability coverage you need. For instance, if you own a building in a high-crime area, you might need to consider higher liability limits. Discover more at Cost-Effective Outsourcing Insurance Solutions.
Personal property coverage in a landlord insurance policy protects items you keep at your rental, like lawn equipment, from damage or theft. This is different from other structures coverage, which typically covers garages, carports, fences, sheds, gazebos and pools. You can also customize your coverage to include optional add-ons. These can range from emergency assistance to additional construction expenses. XINSURANCE agents will review your needs and compare policies to find the one that makes sense for you.
Property Coverage
While every landlord policy has its own features, most of them offer protection for three types of losses: dwelling coverage, other structures (like sheds and fences) and personal property. Some landlord policies also include loss of rental income. Landlord insurance typically costs more than homeowners insurance, but it offers extra protections for landlords who rent out their properties.
Dwelling coverage pays to repair or replace your rental home if it’s damaged from certain perils, such as fire and major wind and hail. This includes the cost of materials and labor to rebuild, not just the actual cash value, or depreciated amount, of your property. Other structures coverage pays to repair or replace outbuildings, such as sheds, carports and fences. Personal property coverage protects your furniture, appliances and lawn equipment that you keep at the property from damage or theft. Finally, some landlord policies provide for additional construction expenses to bring a building up to code after it’s damaged.
Optional Add-Ons
A standard landlord policy doesn’t include coverage for flood damage (it requires separate insurance from the National Flood Insurance Program). However, some insurers offer optional add-ons that can provide more comprehensive protection.
For example, Liberty Mutual’s landlord policies come with standard property coverage for damage caused by a named peril such as fire or explosion, as well as wind and hail. It also offers replacement cost coverage that reimburses you for the full amount of your insured structure’s value, without deduction for depreciation. And it offers multi-building coverage that lets you bundle up to five buy-to-let properties together on one policy with all of their contents and buildings cover, all renewed on the same date.
Other providers have add-ons that you can purchase for more comprehensive coverage, such as landlord legal protection, which covers legal fees up to PS100k if you’re sued by your tenants. These can help protect your rental income while you manage and repair the property.
Policy Exclusions
Landlord insurance can provide significant protection against the various risks that come with renting out property. But there are some exclusions to keep in mind.
For example, landlord policies typically don’t cover the cost of unpaid rent if an incident makes the rental property unusable. For this, you’ll need special “loss of income” coverage added to the policy. Additionally, landlord policies usually exclude routine maintenance and normal wear and tear on furnishings unless they’re added as an add-on.
The location of the property and the type of tenant you have are also significant factors when determining the rates you’ll pay for landlord insurance. For instance, short-term rentals and Airbnbs may increase your rates as they pose more risk to insurers than long-term tenants. You may also face higher rates if you have multiple properties in different locations with the same carrier. In these cases, it’s important to shop around and compare rates with other providers.
