Landlord home insurance is one of the most important and most valuable purchases for an investment property owner. With the help of landlord insurance, you can save from hundreds to thousands of dollars which could be a real life saver in case of any accident. So if you are a new landlord and don’t know what insurance policy to get for your property then this guide will surely help you.
Landlord insurance consists of various parts which can be quite confusing and difficult to understand. So here are some of the components which you should look for when purchasing a landlord home insurance.
Protection From Natural Calamities
The first thing you would want to protect your house is from any sort of natural disasters like fire, flood, storm, earthquake, tsunami and sometimes rioting and civil unrest. Flood or earthquake can occur anytime and without any warning, so protection from this kind of calamities is always recommended for any property owner.
The second thing to look out for is what things are covered by your buildings insurance. Buildings insurance is usually taken out to cover the structure of the building such as cables, pipes, gas and plumbing lines along with fixtures and fittings. Landlord buildings insurance also covers external structures such as swimming pools or lawn fences which can also be damaged. The important thing to remember while going for the buildings insurance is that money should cover the whole or at least partial destruction of the property.
If you are renting out a full furnished apartment then you must have contents insurance. Contents Insurance includes items which are not considered as a structure of the building and not covered under buildings insurance. Some of these items include furniture, carpets, home appliances and other household goods. Content insurance only covers items owned by the landlord and not by the tenant. This insurance usually covers damage to any item caused by the tenant and/or guests. It is always wise to take out a contents insurance since you never know what your tenants are doing while you are away.
Default of Rent
The biggest risk for any landlord is the loss of rent from its property but this risk can be minimised by rent default insurance. Rent default insurance protects landlords from any loss of rent. Sometimes tenants could face some financial problem or they can default their rent deliberately which creates huge problems for landlords. Moreover, due to rent default, landlords can face massive financial difficulties if there is a mortgage on the property. With rent default insurance, you can avoid such problems. In addition to that, this insurance also covers the period when the house is uninhabitable for tenants due to repairing or any other reason.
Liability insurance covers any damage caused by the tenants and/or guests on your property. For example, the tenant might get injured from a gas pipe leak or might break his hand by falling from the stairs and blame the landlord and want compensation for it. Liability insurance was designed to overcome such problems and help landlords to protect from such claims by tenants.
Now, that you know the essential elements of a landlord home insurance, don’t just go to any insurance company and take out an insurance. Rather, get landlord insurance quotes from various insurance companies and choose the one you like. Another important thing to remember is that if you are in a confusion it’s always better to be overinsured rather than underinsured because spending few hundred dollars a month could save you from a lifetime of worries.