Landlord insurance is a great way to reduce financial risk if you rent one or more of your properties to tenants. This is often necessary as a homeowner insurance policy typically covers only owner-occupied homes. This review discusses whether or not landlord insurance is worth having according to your needs, highlighting what landlord insurance is exactly and the benefits of a policy.
What Is Landlord Insurance?
Landlord insurance, also called rental property insurance, covers costs associated with your home while someone else (other than the owner of the home that is listed on the homeowner insurance policy) occupies the home. There are a range of coverage options available. Although, the primary coverages for a landlord insurance policy include property damage, claims of liability and loss of income due to missed rental payments or a property that is currently uninhabitable (i.e. if there is mold that is being removed).
Landlord vs. Homeowner Insurance: What’s The Difference?
A landlord insurance policy and a homeowner insurance policy both cover damage to the home and claims made by others. However, a homeowner insurance policy generally only covers the home if the owner currently lives there, and it is not likely to cover claims if you are renting the home out to others. A landlord insurance policy protects the homeowner while they are renting the home to others.
What Are The Benefits Of Landlord Insurance?
There are two primary benefits of landlord insurance. The first is that it gives peace of mind to both the homeowner and the tenant. The second is that it provides a higher level of financial security for the property owner and reduces the risk of crippling costs that may otherwise arise from claims of liability, property damage or lost income due to the home being uninhabitable for an indefinite amount of time.
Gives The Landlord (And The Tenant) Peace Of Mind
Property owners that do not have a reliable landlord insurance policy are at much greater financial risk if something catastrophic occurs to their property. This leads many to constantly worry, which, in return, contributes to a landlord that micromanages the property and frustrates current tenants. Landlord insurance can also give the tenant more peace of mind as well, knowing that the claims process, in the event of an uncontrollable catastrophic event, will be effortless.
Property owners that do not have landlord insurance have to financially account for the increased risk. They must keep substantial savings in the event something were to go wrong with the property that requires a major investment to repair. Otherwise, they risk being unable to meet the necessary repair costs and suffering a major financial loss.
Mitigates The Landlords Overall Financial Risk
Claims of liability, significant damage to the property or lost income due to the property being temporarily uninhabitable can lead to financial challenges in the absence of a reliable landlord insurance policy. In many cases, the costs associated with addressing these concerns without the financial assistance of insurance are devastating for rental businesses. Those who have a reliable policy are often able to make it through challenging times without any financial loss.
When determining if landlord insurance is financially advantageous for you, it is important to consider the various financial risks that may occur without it, and plan for the worst case scenario, ensuring you have the financial backing necessary to continue your rental business.
Is Landlord Insurance Worth The Cost?
Landlord insurance is a valuable investment for property owners that do not have the financial capability to cover incredibly high costs of an event, or back to back events. If your property is severely damaged by a hurricane while a tenant occupies the home, and you do not have a landlord insurance policy, you could be responsible for the replacement costs as a homeowner insurance policy is not likely to cover the costs since the owner does not occupy the home.
Although it is important to assess specifically how landlord insurance can benefit you according to your specific situation, landlord insurance is, in most cases, strongly encouraged for anyone who owns one or more properties that they lease to someone else. This applies to a large property management group, a real estate investor or an individual with a second home that they wish to rent to others while they are not living there.
Pro Insurance Group Offers Landlord Insurance For Property Owners
If you own one or more properties that you rent to tenants, consider how a landlord insurance policy can benefit you and your investment. At Pro Insurance Group, we take great pride in offering financial security and protection for our clients by offering reliable landlord insurance, as well as other coverage options. Call our office at (833) 619- 0770 or send a message today to get started.