Landlord insurance is insurance that covers a residential rental property. This type of insurance is for people who are renting out a home or an apartment to another person, or tenant. Before renting out the property, you should get proper coverage to protect yourself, your tenants, and the property. There are three different policies; known as dwelling policies available for landlord insurance: DP-1, DP-2, and DP-3. These policies range from lowest to the most comprehensive level of protection. A basic plan will cover the property itself, other structures on the property, and items on the property that you own. The basics are:
Property damage coverage such as a natural disaster, fire, or irresponsible tenants.
Rental default insurance covers your property if it becomes uninhabitable due to factors like mold, termites, or vermin. It provides temporary rental reimbursement to cover rent loss.
Liability protection covers medical or legal fees if a tenant or visitor is injured on your property due to maintenance issues; such as structural collapses or bee hives.
After meeting the basic requirements, you can add on additional coverage to best suit your needs. This coverage is not mandatory, but it comes in handy and could end up saving you money in the long run. This can consist of:
Guaranteed income covers you in the event that your tenant doesn’t pay or comes up short on rent for the month.
Flood coverage is helpful if your property is in a flood zone. It will also cover your property during a plumbing emergency. Sometimes this coverage will need to be added in addition to a natural disaster policy.
Emergency coverage protects you in the event of a tenant emergency, such as a leaking dishwasher or a locked out tenant. It will cover your travel costs to aid your tenant.
The benefits of having insurance can mean protecting your property for future use and having peace of mind for you and your tenants.