Having the right insurance if you are a landlord is crucial. You want to be protected against all possible claims and damage from a slip and fall to a massive fire. How do you know what is the right insurance if you are a landlord?
Choosing the Right Insurance If You Are a Landlord
You must have the right insurance if you are a landlord. Granted, the idea of renting out your home when you are on vactation and it is empty is very tempting. However, you must protect your assets against loss. Don’t focus on the gain and ignore the risk.
All kinds of potential problems can arise when renting your home. What if someone sleeping on your couch or spare room accidentally starts a fire? What happens if your renter falls on an icy step? Are you protected? You need the right kind of insurance if you are a landlord. Ask us at the Lise Howe Group for recommendations for insurance agents who understand landlord protection!
Consider these issues if you are planning to become a landlord:
Short Term Rentals
If you have a short term rental property, ask whether your current insurance is the right kind of insurance if you are a landlord. Your existing homeowners or renters insurance policy may already allow for short-term rentals without any modifications. You may or may not have to notify your insurance company – but you might want to review your policy or ask for clarification.
When you’re renting your home one time, you may need to notify your insurer in advance. Then your insurance company will extend your existing coverage to the renter. On the other hand, some insurers will require an endorsement, also called a rider, to the existing policy. The rider provides insurance for rentals, especially if you’re doing it regularly.
If the short-term rentals are to “guests,” such as through Airbnb, that could constitute a business. Most insurance policies don’t provide coverage for business activities inside a home. A business policy for a hotel or bed and breakfast would be needed. Other insurance companies offer home-sharing liability insurance, purchased on a month-to-month basis as you need it. Do some research to confirm that your insurance is the right insurance if you are a landlord!
Insurance for Long Term Rentals
What is the right insurance when renting your home or a vacation home for six months to a year?
In this case, you’ll likely need a landlord or rental dwelling policy. These cost about 25 percent more than standard homeowners policies to provide increased protections. Clearly, it is important to choose the right insurance if you are a landlord. Even if you rent a condo, you need landlord insurance. You need insurance over and above the master insurance policy that you get from the condo.
Landlord policies provide property insurance coverage for physical damage to the structure from fire, lightning, wind, hail, ice, snow etc. Your personal property that’s left on-site such as appliances and lawnmowers also is covered. However, a tenant’s personal property is not covered under the landlord’s insurance. This gap in coverage is why many landlords require their tenants to purchase their own insurance protection.
Landlord insurance also provides liability coverage if a tenant or guest is injured on the property, covering legal fees and medical expenses. Perhaps one of the best reasons to get the right kind of insurance is that landlord policies can also provide coverage for loss of rental income. If you aren’t receiving rental income while the home is being repaired or rebuilt because of damage from a covered loss, your insurance coverage will kick in.