landlord insurance

7 Reasons Why Landlord Insurance Is Worth Paying For

What is something every landlord should have? Landlord insurance. Unfortunately, far too many landlords underestimate their need for this very essential form of insurance.


What Is Landlord Insurance?

Simply put, landlord insurance is a type of insurance policy for any person who owns and operates a rental property. It is a specifically designed insurance for landlords and includes two forms of protection: property damage and liability coverage. As with other types of insurance, landlord insurance helps shield the insured from financial loss.


The Benefits of Getting Landlord Insurance

It is not mandatory for rental property owners to purchase landlord insurance. That being said, it is still advisable to do so for a wide range of reasons. The best landlord insurance offers the following advantages:


landlord insurance for rental property1. Helps Pay for Property Damages

Landlord insurance for rental property typically comes with coverage for the dwelling and other structures. Dwelling refers to the rented premises, such as an apartment, a home, or a condo. Meanwhile, coverage is also offered for other detached structures, such as a detached garage, shed, or fence. If the rental property suffers from any damages from a covered peril, landlord insurance can help pay for the cost of repairs.


2. Helps Pay for Repairs to Personal Property Used for Service

It is not uncommon for landlords to leave personal property on the rental property for tenant use. This includes things like lawnmowers, leaf blowers, and other forms of equipment. If the equipment becomes damaged, landlord insurance can also help pay for the cost of repairs. Of course, it doesn’t extend to personal items that are not intended for rental property service. As such, if you leave your watch behind and it breaks, landlord insurance won’t cover it.


3. Helps Protect Rental Income

Sometimes, a rental property becomes far too damaged that it is no longer habitable. This leads to a loss of income for the landlord. Luckily, landlord insurance can also temporarily cover the rent money that you would have otherwise earned if the property was habitable.


4. Helps Cover Liability

Landlords can also face liability claims. For instance, if a tenant or guest slips on damaged stairs and injures themselves, landlord insurance can cover the cost of medical fees. If that person decides to sue, a landlord insurance policy can also pay for the legal costs.


5. Helps Protect Against Vandalism

Graffiti and other forms of vandalism can happen to any rental property, rendering it unattractive and driving away potential tenants. If you want to have vandalism repaired, you will typically need to pay for the cost out-of-pocket. But, with landlord’s insurance, you can have your insurance company cover it. Keep in mind, though, that vandalism coverage is typically an add-on coverage and doesn’t come with most standard policies.


6. Helps Protect Against Burglary

Did you know that over a million burglaries occur every year in the United States alone? With such a high risk, you need to have protections in place.

Burglary protection is another form of additional coverage that usually doesn’t come with standard policies. This coverage pays to replace any stolen items that the landlord owns and keeps in the rental property. For instance, if the rental unit comes with a television and someone steals it, insurance should protect you. Meanwhile, the property damage resulting from the break-in will typically be covered by the standard policy.


landlord insurance cost7. Helps Keep Up With Building Codes

After a covered peril damages part of your property, you will need to repair it. Sometimes, though, you will have to upgrade some items as you repair the damaged portion of your property. For instance, your local government may require you to adhere to new building codes. Upgrades are, of course, more costly, but landlord insurance can help pay for them.


Landlord Insurance vs Homeowners Insurance

Some landlords mistakenly believe that homeowners insurance is enough to offer them adequate financial protection. But, homeowners insurance is not designed for rental properties. Homeowners insurance usually only applies if you are living in the home. It may still apply if you are just renting out a room in the home to someone else. But, if you are renting out the whole place, homeowners insurance will not cover you.

Another key difference between these two types of insurance has to do with the liability portion of the policies. Landlord insurance offers protection if a tenant or guest becomes injured on the rented premises. On the other hand, homeowners insurance covers you, the homeowner, and your relatives, even if the injury doesn’t happen at home.


How Much Does Landlord Insurance Cost?

While it is true that landlord insurance costs more than homeowners insurance, the gap isn’t all too wide. Plus, considering homeowners insurance serves an entirely different purpose, your insurer may not even honor your claim if it is for a rented property.

When it comes to annual premiums, landlord insurance costs about 15% more than homeowners insurance. On average, this equates to around $1,481 per year. Make sure to ask for a landlord insurance quote from different providers so that you can compare what they have to offer.


Property Management Company and Landlords Insurance

Managing a rental property often comes as a challenge. Either due to a lack of time, expertise, or interest, many landlords choose to hire a property management company to take over the operation.

But, even with a property management company, landlords must still purchase adequate insurance. A property management company’s insurance policies typically won’t extend to the landlord. Though, landlords can ask their property management company for advice on what kind of coverage best suits their rental property.


best landlord insuranceNecessary to All Landlords

Every property owner should take the precautions needed to safeguard their assets and financial interests. In a landlord’s case, that means taking out a landlord insurance policy that offers sufficient protection.

If you need advice on insurance or simply want professional help, a property management company is the one to call. Find the best property management companies in your area using our online directory.