Understanding Landlord Insurance

Do you have another home as a rental or investment property? If so, you may be wondering how best to protect the property even when it’s not your primary residence. You may be considering a homeowners insurance policy as a way to protect this piece of real estate. However, this is not the right policy to choose if you are turning your home into a rental or have decided to buy an investment property.

Rental properties require their own type of coverage. Landlord insurance is required, which is considerably different than the homeowners policy you purchase when you live in a house yourself. Landlord insurance protects you against losses from fire, theft, lightning, falling trees, wind, hail, water damage, and injury to your tenants and their guests.

This type of coverage does not protect the renters’ household goods. You should require that tenants must take out a rental insurance policy to cover their belongings and their liability for their protection and yours. It is suggested that you include a clause in your lease saying that renters insurance is required, so that they understand their responsibility to protect their possessions.

What landlord insurance covers:
• Lighting, windstorms, hail, explosion, riot, frozen pipes, water damage, burglary, vandalism, falling objects, and more. These will be outlined in the policy.
• Items that belong to you that remain in the property, such as appliances, furniture, or lawn care equipment. Be sure to keep an inventory of what is left on site.
• Outbuildings like sheds and garages. This coverage will typically have its own limit.
• Costs to defend yourself against lawsuits filed by tenants or guests, as well as costs awarded if you lose the case. Some policies cover medical bills for injuries, while others do not.
• Lost renal income if the property is damaged and you can’t rent it out.

What landlord insurance does not typically cover:
• The tenants’ belongings.
• Your rental property if it is vacant for more than 30 days.
• Upkeep, maintenance, and neglect.
• Intentional damage.
• War, nuclear, biological, or chemical attacks.

Optional coverages that may be purchased:
• Flood
• Earthquake
• Vandalism (if the policy you purchase excludes it)
• Liability for wrongful eviction, wrongful entry, libel, and slander

When to file a landlord insurance claim
When your property has suffered damage, you should assess the scene and then let your insurer know as soon as possible. If it is minor damage, you may want to handle the repairs yourself. For example, if your deductible is $2,000 and the total cost of replacing a broken window and repairing items is $2,500, you would be paying a large chunk of the repair bill before the insurance steps in. Talk to your insurer if you are unsure about whether or not to file a claim.

Safeguard your property with quality landlord insurance. Contact the team Lou Aggetta Insurance Services in Pleasant Hill to get started on your tailored policy. We can help you assess your needs and risks so that you are better able to safeguard your rental or investment property against damage and loss. With the right policy, you have peace of mind that your finances are covered if the worst does happen.