Covering Your Bases: Do You Know the Difference Between These Three Types of Landlord Insurance?

Every landlord works to make a profit. They typically don’t purchase a building for use by others unless they can generate income from the property or obtain a tax write-off. However, the property needs to be protected at all times so the landlord doesn’t take an unintentional loss. Fortunately, a person may purchase landlord insurance to receive this protection. There are three types of landlord insurance every person in this position should consider obtaining.

Liability Insurance

A landlord may lose a great deal of money fighting lawsuits filed by tenants whether or not the claims have any basis in fact. If any person is injured on the property, for example, the injured person may file suit against the landlord and claim this individual was negligent when it came to maintaining the property. The same is true if a tenant’s property is damaged in any way due to the negligence of the landlord.

Liability insurance steps in to cover any legal fees incurred by the landlord, court costs, damages that must be paid to the tenant if they win the suit, and more. While this type of insurance isn’t mandated by law, it is recommended every landlord have a liability policy in place to protect themselves from the high costs of legal actions. Those interested in obtaining this type of coverage can see more at rogerbutlerinsurance.com

Property Insurance

Landlord property insurance is different in that it actually covers the structure located on the property. Imagine having a fire and the structure is completely destroyed. The landlord is responsible for rebuilding the property and must pay out of pocket to do so if no property insurance has been obtained. Tornadoes, hurricanes, and other natural disasters are typically covered under this portion of an insurance policy as well.

Additional coverage may be needed to cover other structures located on the property, such as a detached garage, shed, or other outbuildings. However, be aware that flood insurance may need to be purchased separately. It’s best to speak to a licensed insurance agent to determine what coverage is needed and in what amounts. Know the estimated replacement value of any buildings to be covered before shopping for this type of policy, as the agent will need this information to provide an accurate quote.

Additional Coverage

Landlords often spend their own money to make a property nice for tenants. For instance, a landlord may choose to install new carpeting right before a new tenant moves in. If something happens to the carpet, the landlord must then take money out of their own pocket to replace or fix it and then possibly sue the tenant to recoup the costs. Another option is to purchase additional coverage that will pay for these types of expenses so the landlord doesn’t have to. It’s an option every landlord should consider, weighing the benefits and costs of the coverage to determine if they feel it is necessary.

Landlords may also choose to include a clause in the rental agreement requiring tenants to obtain renter’s insurance. This type of policy covers any belongings on the tenant if they are damaged in a fire, natural disaster, or another occurrence. Again, speak to an agent to determine if this type of policy will be needed and when it should be obtained. The landlord needs to be protected at all times, and the right insurance coverage ensures they are.