There are many good ways to protect your investment property, and every risk management plan starts with proper insurance. You don’t want to think about worst case scenarios, but you also don’t want to leave things to chance.
A good landlord policy will protect you against potential catastrophes and natural disasters, as well as liability and lost rent.
Sometimes, there’s confusion over what landlord insurance does and does not cover. It’s not the same as your homeowner’s insurance policy, and it works best when there’s also a renter’s insurance policy in place that your tenants hold.
Let’s take a look at what your landlord insurance covers and why you need it.
Property Damage and Structural Repair/Replacement
Landlord insurance covers you against the damage that’s caused when a tree falls onto your roof or a flood damages your floors. The physical property is protected by landlord insurance, and your policy will cover any repairs or replacements that are necessary after a covered loss.
You’ll need to keep up with your property value and with the cost of materials and supplies. If you have not evaluated your landlord insurance policy recently, it’s worth taking a look. Repair costs have gone up dramatically over the last two years, and your property is likely worth more than it was when you first insured it. Don’t find yourself paying extra out of pocket just because you did not have enough coverage.
Loss of Rent
When your property suffers serious damage that leaves it impossible to live in, your tenants will need to move out until it’s habitable again. That will come with a loss of rent, and you’ll want to recover quickly. An insurance policy that includes loss of rent coverage is essential. If your landlord policy does not include it already, make sure you add a loss of rent rider so you’re protected financially.
Liability Insurance for Landlords
A good landlord policy will have a lot of liability insurance. This protects you against any claims for damages or lawsuits that can be brought against you when something happens at your property. If someone gets injured on your property, your liability insurance will cover you if they sue you for damages.
Landlord insurance is more comprehensive than home insurance, and this helps you protect your investment.
Always include renter’s insurance requirements when tenants move into your rental home. Your landlord policy will not cover their personal possessions, and if there’s a fire or a flood or someone breaks into the property, you want your tenants to be protected. They’ll want to repair or replace what was damaged or stolen. Write the renter’s insurance requirement into your lease agreement.
Landlord insurance is an essential form of coverage for any real estate investor who owns a rental property or properties. It covers everything from property damage and lost rental income to liability coverage in case someone is injured on the premises.
Finding the right policy at an affordable rate is easy when you’re working with a great insurance agent. If you don’t already have one, we can make a referral. Contact us at Real Estate Gladiators when you’re ready to talk about landlord insurance and what you need. We serve Monroe, Issaquah, Bellevue, Everett, Lake Stevens, Kirkland, and other cities in and around King and Snohomish counties in Washington State.
