Being able to rent out a home you’re not using for all of the year or even part of the year is undeniably a great way to make some money. It’s also a great way to lose money if you don’t have landlord insurance.
Not to be confused with homeowners insurance, which only covers the house and property while the owner(s) are living there, landlord liability insurance will provide coverage for when the property is being rented. This is the most crucial difference between the two kinds of home insurance and landlord home insurance. Other than that, landlord insurance will cover many of the same things covered by regular home insurance—with a few caveats.
Let’s get into them here so you can get a fuller understanding of landlord property insurance, what it covers, and if it is something you need.
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As mentioned, a landlord insurance plan will cover many of the same things your regular home insurance will cover. For instance, it protects your property in the event of a fire or storm. But landlords also face singular challenges that regular homeowners don’t encounter. We’re talking about risks like loss of rental income or injury liability.
These added perils make rental properties more expensive to insure. As a result, landlord homeowners insurance policies are up to 25% more costly than homeowners insurance. On the other side of this expense, however, is the substantially more off-putting fact that if you are renting out your home and do not have landlord home insurance, you may be denied coverage by your homeowner’s insurance when you need it the most.
Like all insurance, a landlord rent insurance policy is subject to limits and deductibles that will vary from one provider to the next. This said, there are some coverage options that most landlord insurance policies offer under their standard plans.
These options include:
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You can’t assume nothing will go wrong, even if you have dream tenants and your property is in a place with mild weather and low crime rates. Life is full of surprises. As soon as tenants move into your home or building, regular home insurance is no longer enough. Any large appliance malfunction, theft, no-fault accident, or natural disaster that happens that impacts your home is your responsibility, and you are left to foot the bill.
Since the main purpose of landlord insurance is to cover you, the landlord, it doesn’t cover what your tenant brings with them. This means if your client’s jewelry, TV, furniture, and car are stolen, then that’s on them—not you. For this reason, you should encourage your tenants to get tenant insurance.
Landlord home insurance also doesn’t cover repairs. If your furnace stops working or your water heater breaks down, then you have to pay to have them fixed.
We understand that landlord house insurance is an added expense, but when you consider all that could go wrong when owning a rental property, it’s better to think of it as an investment in your investment.
As we’ve already mentioned, landlord insurance can be up to 25% more expensive than homeowners insurance. The reason is simple: tenants don’t treat your home as well as they would their own home. As a result, some tenants are more negligent, leaving your home more susceptible to fires, break-ins, and other accidents.
Tenants are also more like to litigate for slips or falls. If they lived in their own homes, they wouldn’t sue themselves, but they might sue you.
In other words, you need landlord liability insurance.
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If you are renting out a property, you need some kind of landlord home insurance. Without it, you will be left paying heft sums out-of-pocket for accidents as well as major and minor disasters that would have been covered had you just got a landlord insurance quote.
And a quote is a place to start. Don’t assume the insurance provider that does your homeowner insurance is going to give you the best landlord insurance. By all means, get a quote from them too, but also shop around and get quotes from at least three other providers.
Our landlord insurance feature quotes from the top providers in this niche insurance market, so you can request a quote here and know you are getting the best prices and the most reliable coverage.
If you’re renting out your property to tenants, yes, you should have landlord insurance. It can protect you from having to pay tens of thousands of dollars (or more) in damages out of pocket.
This said, unless you are buying the property to rent it out—in which case, your mortgage provider might require you to have landlord insurance before they will provide financing—you do not legally need it.
You bet, and depending on the type of property you’re adding, this can either increase or decrease the price of the policy. Again, this is where quotes come in handy. Request free comparison quotes for landlord insurance to get a handle on the best price for the best coverage.
Yes, you can deduct your landlord insurance premiums. Being a landlord is a business venture, so it makes sense that you should be able to deduct your premiums as a business expense.
Lauren Lewthwaite Lauren Lewthwaite has been freelance writing for almost five years writing content that ranges from health to insurance and everything in between. Lauren is also a trained translator in French and English and is a dog-mom to an adorable Australian Shepherd.
