Landlord Insurance is Vital to Protecting Your Investment
Landlord insurance is coverage designed for rental properties. It protects the owner against most hazards associated with a homeowners policy such as fire, theft, and liability for injuries. The policy covers buildings and often has an option for items inside the building which belong to the landlord.
When you decide to become a landlord, the risks significantly increase for you and your insurance company. If you own a rental home, it’s vital to protect the property as well as the income. Your homeowners policy won’t provide coverage for your rental property. Whether you purchased the house as an investment or you’ve decided to take tenants in your vacation home, you need landlord insurance.
After you decide to rent your property, talk to an insurance agent about the extent of coverage you need as well as options that may be available. With your policy in effect, if a loss results from a covered event, you’ll be compensated for your damages based on your coverage level.
Three levels of dwelling policies are available. They are:
• DP-1 which protects against basic incidents such as fire and vandalism. It pays actual cash value after a loss.
• DP-2 which covers specific hazards named in the policy. Wind damage to your property and a car hitting your house are examples of possible hazards.
• DP-3 which is an open peril policy. It covers any incident that isn’t specifically excluded from your coverage. It pays the replacement cost after a loss.
Landlords may also want to consider other options, including:
• Protective policies to cover breakdown of equipment such as a furnace
• Loss of income when a tenant has to move out due to repairs for a covered event
• Liability to protect you against legal action resulting from injuries that occur on your property
Having adequate insurance for your rental property is essential. If an incident occurs, you’ll benefit from the protection provided for your investment. It can help you repair or replace the house, defend you against litigation, and safeguard against loss.