Landlord insurance, which is actually an expanded version of homeowner’s insurance, can be an effective safeguard that will compensate a landlord from losses which may arise from situations such as fire damages, lost of rental incomes, lose or damage of the landlord’s properties which are used by the tenant, and some maintenance. In addition this type of insurance will also cover the landlord against possible legal fees arising from an injury which a tenant may contend as attributable to the property.
Landlord insurance is therefore a sensible and vital measure that property owners should invest in since the situations enumerated above are realistic and common cases that often occur in many rented properties. It is not something to be ignored and taken for granted or else a landlord may just find himself mired and facing costly expenses for damages or legal fees. In the worst case scenario, you lose the entire property. A landlord with good business sense should always see the wisdom behind investing in this type of insurance coverage which ensures the long term viability of the renting or leasing venture.
What Does Landlord Insurance Cover?
As mentioned earlier, landlords insurance is just an expanded form of homeowner’s insurance that provides additional options to a property owner who or rents his property. So what are these common additions that distinguish it from standard home owners insurance? There are basically four aspects to a landlords insurance coverage and these are buildings insurance, contents insurance, loss of rent insurance, and landlord liability insurance. We will discuss each in detail.
Landlord Building Insurance
Similar to homeowner’s insurance, landlords building insurance is basic coverage that will insure a leased property from risks of damage or total lost which may be brought about by events like flooding, fire, storms, or earthquake. It also includes coverage for repairs in situations such as burst pipes or malicious damage caused by the tenant. In other words, the insurance company will compensate the cost that you may incur from repairs in case of damage.
The total amount that a landlord could claim would be determined normally by the price of premium he is willing to pay or to the assessed value of the property being insured. It will all depend on the particular insurance company he is dealing with of course.
Landlords Contents Insurance
As a landlord, you may need to install some items to furnish the property as part of the services you extend to the tenants to maintain the building. Landlord’s insurance will also provide coverage to them in such situations where these things are damaged or stolen by the tenants. Examples of these items include carpets, sofas, chairs and even televisions sets. Sometimes, despite careful evaluations during the application process, there are still unscrupulous tenants who could escape scrutiny. It would be wise, therefore to have protection from the risk and liability of their acts.
Lose Of Rent Insurance
This is a very important coverage in cases where a landlord loses the regular rental income he earns from the property due to damage a fire or other natural disaster causes. This renders the building unfit for habitation until necessary repairs or rebuilding are accomplished. During those times, this coverage will compensate the landlord for the income he should have received if such situations did not occur. This type of landlord insurance may also include guaranteed rental payment should a tenant refuses to pay the rent.
Depending on the kind of policy you agreed to, the period of coverage will vary in the number of months that you will be compensated for the loss income.
Landlord Liability Insurance
A landlord will never know what accident may befall his tenant while living in his property. The worse scenario is that you will be blamed and sued for such accident due to negligence. This can lead to costly legal fees. Landlords insurance will cover the legal expenses incurred by the property owner during the trial should a tenant file personal injury claims in court. This protection can also extend in scenarios where the tenant obtained a favorable judgment from the judicial process.
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