What does Landlord’s Insurance Include?
While renting a house, the landlord’s insurance policy covers certain risks associated with the possibility of living in a house. Such risks include any sort of accidental damage to the property by the tenant or even by natural occurrences. The landlord’s insurance policy covers the following two 2 areas:
- Personal Content Cover:Covers the replacement or repairs required for damaged or lost owner possessions
- Liability Cover: Protects your tenant, against damages caused to the building and also protects you if someone else is injured in your rented accommodation
What will a Landlord Insurance Policy Cover?
When you buy a landlord insurance policy, your insurer will provide you with extensive coverage and the most common ones include:
- Cover against Property Damage:Damage caused to the structure of the buildings as well as total loss incurred against the property in the case of a storm or cyclone.
- Cover against Loss of Income:The period when your rented accommodation has become un-habitable in case of any natural damage, your loss of rental income would be compensated for by the insurer.
- Liability Insurance against Third-person: You would be covered for the expenses required for lawsuits as well as claims in the case a third party gets injured in your property and you are found responsible for the same.
Please note that you can also opt for add-on coverage some of which includes the following:
- Landlord’s content insurance
- Rent guarantee
- Insurance for natural disasters
- Employer’s liability insurance
How important is a Landlord Insurance?
It becomes crucial to keep landlord insurance handy in case you rent out your accommodation throughout the year without residing inside. Following are the reasons why:
- Keeps you guarded against any natural disasters or accidents resulting in financial burden and unplanned liabilities for you
- In case the rental income is your only source of income, landlord insurance helps you live your life with peace as you won’t be worried about the loss of rental income ever
- Will cover for any expensive loss and damage to your property for which you might have to spend money from your pocket
- Also covers any unforeseen liability claims that would arise in the future
Why should you go for it?
A home that is insured offers you a certain level of peace of mind while living as it gives you comprehensive coverage from the associated risks that you might face from renting your accommodation in the present or future. Some notable illustrations are as follows:
1. Keeps You Protected Against Damage Caused to the Property
The home insurance will keep you financially covered in case of any mishaps. For example: In the case of a fire outbreak resulting in damage to the property, you would not need to pay anything from your pocket as the home insurance will pay for all the required repairs in the building. (Please keep in mind that the coverage will have its own set of limitations)
Besides this, you are also covered in case of activities such as theft or vandalism by the owner as well as coverage for the replacement cost of the entire property in case of total loss occurred.
2. Saves You from the Loss of Rental Income
Your rented property always shares a high risk of being unhabituated by your existing tenant in the natural occurrence of events such as storms, cyclones, or even a fire. In such instances, you will always face the possibility of losing out on your rental income.
Hence, the insurance policy will reimburse you for the loss of income suffered in such a case scenario.
3. Protects Your Liability against a Third-Person
In case a third person gets injured in your rented accommodation, the first person who is held to be liable is you, in case you are discovered to be responsible for the person's bodily damage, being the landlord. In such cases, your home insurance keeps you covered financially.
For example: In case you have a broken staircase and the third party suffers considerable damage while being on your property, your liability would be covered under the insurance. Also, in case the damage proves to be fatal and the third party ends up filing a lawsuit against you, the insurance will still protect you against the to-be incurred expenses.
Is a Landlord Insurance Policy Expensive to Buy?
Following are some factors that would affect the amount of premium required for your landlord insurance policy:
- The geographical location of the property
- Associated risks and probability of the occurrence of natural disasters near the property
- Level of security installed in the building as well as in your house including CCTV Cameras, burglar alarms as well as security guards
- How much coverage is being offered by the policy is also a deciding factor for the amount of premium you would have to pay
Being the landlord, it is your responsibility to properly plan your house and its expenses before renting it out. After all, safeguarding your own house won’t be the duty of any incoming tenant.
Landlord insurance gives you a very convenient option to safeguard any future events that might cause heavy financial and legal expenses on your pocket landing you in unwanted trouble so that you can enjoy your rental income worry-free.