Importance of Landlord Insurance
Rental property can be an excellent investment. With rental property, the owner can acquire taxable income from the rents of each unit at a property. Although there are maintenance costs, managerial duties that may require personnel workers, and property taxes, rental properties give owners a steady, monthly stream of revenue and owning properties can equate to a livable, full-time occupation.
Along with taxes and investments, insurance policies are very important costs to pay for when owning a rental property. One policy that is integral to any rental property is landlord insurance. This form of insurance is very important to have and can help the landlord save immense money over the long term.
What Is It?
This form of insurance is a form of insurance that protects the landlord from any losses that come from property damage at the rental property.
Who Is It For?
The insurance is only for the owner of the rental property. It does not cover the tenants or their personal property in the rental property.
How It Works?
Landlord insurance covers the entire rental property and any other property on the grounds that is covered under the policy. The insurance policy will cover the gamut of property issues associated with owning a property, such as fire or flood damage. The policy will also cover any capital or property that is owned directly or controlled by the landlord, such as the heating and electrical systems, maintenance equipment, and amenities for the tenants, such as washer and dryers. As previously stated, these policies will not cover the property owned by tenants within their own units.
Different Types of Coverage in Existence
Every insurance company will offer perks and extra benefits to their insurance plans that will make property owners consider these policies over others. Some insurance policies have Fair Rental Income policies, where if a rental unit is damaged and the tenants leave or move out due to the damage, the landlord is covered for the lost rental income until the unit is repaired and rented to another person. Associated with this are alternative accommodation policies. This policy helps the owner pay for alternative housing for their tenant while their unit is repaired. Once it is repaired, the tenant can move back in. Liability protection is another extra benefit that could be on some owner’s coverage. This will help pay for any legal counsel the owner needs to pay if litigation is involved with a third party regarding property damage.
The costs associated with property damage can be astronomical. Although any business owner wants to reduce cost, insurance policies are incredibly beneficial in times of great distress for a property. Flooding in basements, fires, malicious property damage, or storms damaging the housing infrastructure can hemorrhage a budget. Landlords insurance will help to cover most or all major expenses and help improve the property after major damage occurs. Not having this form of insurance is a huge gamble for many landlords.