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What is Landlord Insurance?

A For Rent sign placed in front of a house to illustrate what is landlord insurance.

Real estate is one of the most popular long-term investments, and owning rental property is an excellent way to produce income through your real estate investments. Still, there is more to it than just buying a house and finding a tenant. There are many potential pitfalls that come with being a landlord, and good landlord insurance is essential protection that any rental property owner should have. So what exactly is a landlord insurance policy, and what kind of protection will it provide?

What’s Covered by Landlord Insurance?

No doubt you’re already somewhat familiar with homeowners insurance, and if you are new to rental property ownership you might believe that a homeowners policy will cover your home if you rent it out. In some scenarios, you might be right. If you only plan to rent out your home for a short time and this won’t be a regular occurrence, some homeowners policies will provide adequate coverage. You should check with your insurance company, though, as they might require you to add a rider to your existing policy.

If you are planning on renting out your property for a longer term, this would be considered a business. Homeowners insurance does not cover business activities, and so for long-term rentals you’ll need landlord insurance coverage. Exact coverage will vary from one policy to the next, but you can expect a typical policy to cover:

Property damage
Landlord building insurance is intended to cover the building itself from disasters like fire and flood. Usually outbuildings like storage sheds will also be covered, as will maintenance equipment like a lawn mower.

Injuries that happen on your property can end up costing you as the landowner. Landlord liability insurance provides the necessary coverage for medical and legal expenses in the event one of your tenants or their guests gets hurt on your property.

Loss of income
If you can’t rent your property because of a covered event, landlord insurance will help to replace the lost income while the property is being repaired.

What Isn’t Covered?

To the surprise of many tenants, no landlord home insurance policy will cover your tenants’ belongings. Tenants should have their own rental insurance for that. Repairs aren’t going to be covered, either, so if a refrigerator dies, that’s still your responsibility. Lastly, if you live on the property and you’re renting out a room, landlord insurance isn’t for you. These policies are specifically intended for “non-owner-occupied” property.

What Does Landlord Insurance Cost?

Of course you’ll need to talk to an insurance agent to get a landlord insurance quote, but as you begin to compare landlord insurance policies, you’ll find that most fall in a range of about 15% to 20% more than a homeowners policy for the same property. Cheap landlord insurance policies that provide the necessary liability coverage can start as low as $50 per month.

As a landlord, house insurance that you’ve had in the past is probably not going to give you the coverage that you need. Landlord insurance is there to provide the liability protection, coverage for the building itself, and coverage for lost rental income that a homeowners policy can’t, and is something that any rental property owner should consider.

Freeway Insurance can help you find an affordable landlord insurance policy that provides the coverage you need. Request a free landlord insurance quote online or over the phone at 800-777-5620

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