Landlord Insurance and How It Works

What is Landlord Insurance?

Landlord Insurance is a form of policy protecting owners of investment property from a range of risks. The types of accidents that might be protected by a landlord insurance policy include losses or damages incurred by tenants. Damages incurred by natural hazards, such as hurricanes, flooding and fires, can also be covered. It is a policy designed specifically to help financially protect landlords of common risks associated with renting their investment property.  

What To Consider When Choosing a Landlord Insurance Policy?

There are a number of things to remember when purchasing the right landlord insurance policy, such as terms and conditions, what it does and does not protect, and the amount that extends when you file a claim. These considerations can vary from policy to policy, so shopping around and doing your homework on various landlord insurance policies is a good start.

Cost of Landlord Insurance

Landlord policy premiums can differ depending on the state and even on the liability identified with the property’s postal code. Insurance companies may base prices on indicators such as the risk of rent defaults, the risk of damage to tenants, and the risk of natural disasters in the area, based on historical records.

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Inclusions and Exclusions of Landlord Insurance

There are other features you can look for in a policy apart from the necessary inclusions. Some of these may include:

  • Theft or break-in by owners, visitors or other burglars
  • Damage or vandalism inflicted on tenants or their guests
  • Loss of tenancy due to tenant’s failure or contract breach
  • Legal fees incurred to evict a resident
  • Damage from a renter’s pet
  • Legal responsibility for damages towards anyone who enters the land
  • Loss of rent due to an insured case, such as a tenant who defaults on his rent, the death of a single tenant or the eviction of a tenant by court order
  • Return on investments following a rental loss report
  • Disposal of the tenant’s items after a rental loss 
  • The ceiling on the weekly rent you will receive after you report the rental loss
  • Changing of locks following the default of a loan
  • Judicial charges, such as legal fees, applied to a court order for the eviction of a resident or to a rental damage claim
  • Professional tax audit fees cover

Some common exclusions may include general maintenance expenses or the tenant’s repair costs, rental income due to no tenant, and overall wear and tear.

Why Do You Need Landlord Insurance? 

Landlords think nothing untoward will happen to their rental property. However, this is not always the case. Unexpected events do occur. While you can check your tenant’s rental property history, no one can predict the future when it comes to a tenant losing the ability to pay rent which may include a tenant losing their job or suffering from a terminal illness. Landlord Insurance could save you from considerable long-term losses. 

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At GSK Insurance Brokers, we manage the risks, covering you for rent default, damage by tenants to the fabric, fixtures or fittings, and covering your liability to your tenants.

Johnny Thompson

Johnny Thompson is a senior reporter for Generator Research in Los Angeles, reporting on technology, business, finances, and more. He previously worked as a reporter for the Wall Street Journal and got his start at newspapers in New York, Connecticut, and Massachusetts.

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