If You Manage or Invest in Property, Do You Need Landlord Insurance?
To receive extra income, many people decide to purchase property and rent out the rooms. At first glance, this seems like a lucrative business decision; as long as your tenants pay the rent on time.
When renting out properties that you own, many problems can arise. If someone gets injured on the premises or a natural disaster damages a tenant’s belongings, you can be held responsible. Since these events are often unpredictable, it is highly recommended that property owners get landlord insurance.
What is Landlord Insurance and What are its Benefits?
On a very general level, landlord insurance provides coverage to owners renting out one or more units. In the event of a claim, the policy is there to protect you from financial loss related to:
- Damage from fire, vandalism, theft, and some natural disasters.
- Liabilities associated with a tenant or visitor who is injured on the property, in addition to other lawsuits. Your policy can cover medical expenses, legal fees and settlements.
- Damaged items that belong to the tenant.
- Loss of income when one of the units is temporarily unlivable.
In these situations, the policy assists with rebuilding the property. However, keep in mind that your policy will have limits and includes a deductible.
Like any other insurance policy, monthly rates vary, with several factors coming into play:
- Your geographic location.
- The size of the units, and how many you own.
- The building’s condition and age.
- If your building is up to current codes.
- If you rent to smokers.
- If your property has a swimming pool.
- If you have fire sprinklers installed.
- How people can access the property.
- If you have alarms installed.
Along with these factors, an agent puts together a recalculation cost for the building, excluding land, and will further incorporate costs for personal property, such as appliances included in the units.
Be aware that, while coverage isn’t required by law, not having landlord insurance means all above circumstances will result in high out-of-pocket costs.
Thinking about landlord insurance for your property? Explore various business and homeownership solutions today through Ion. Contact us to learn more.