Why Do You Need Landlord Insurance?
Landlord insurance is a special type of insurance specifically designed to guard those who own rental properties against the financial losses that often come with renting them out. It in general covers theft, accidents or acts which cause you to lose rental income. Some examples are fire, burst pipes and storm damage. It may also cover repairs and improvements to your rental property if they are caused by circumstances beyond your control. You will need to arrange this type of insurance as part of your rental property’s insurance, which is arranged by your landlord.
The types of landlord insurance cover available depend on the type of property you own. In general, the more valuable it is the more you will need to insure it. Many landlord insurance policies provide coverage for a total loss due to theft, storm damage or smoke damage. You should check the details of your policy, to find out exactly what is covered and exclude. For example, some policies will not cover flooding.
There are various levels of landlord insurance cover that you can take out. Depending on how much you rent your tenants will be required to take out liability coverage on their personal belongings. This will cover any accidental damage that is caused by tenants such as slips and falls. You may also want to include Contents Liability, Fire and Theft policies. Your landlord insurance cover should also provide coverage for legal expenses if a tenant is found to be responsible for the damages of your rented property. This could include any costs associated with defending themselves.
If you own apartments it may be a good idea to have renters insurance included in your overall landlord insurance cover. It will give you peace of mind that if your property was damaged or stolen that you would not have to foot the repair bill alone. The cost of flooding damage can be enormous and the loss of personal belongings can mean your livelihood is affected for many months. You should have adequate flood insurance to help you replace everything and make your life easier while you try to get your house back together again.
Landlords need to ensure they have adequate liability cover. This will protect them in case any action is taken against them due to tenants complaining about poor conditions, noise or other problems. If a tenant decides to sue you for the condition of the property, you will be financially protected and it will put your tenants at ease. Tenants can sometimes be hard to please, but they do not have to lose their home. It is important to provide them with a safe environment to live in and this requires landlords to take action in a moderate way if they feel their tenants are being unfair.
In terms of investment property, it can be an idea to take out insurance for your self-employed staff. Your staff can take the risk of injury whilst on your site whilst working on the property or they may accidentally slip and fall on stairs that are not lit up properly. Accidents can happen when it is not uncommon for cleaners to slip when cleaning or water damage can occur due to faulty pipes or flooding.
Landlords who are renting out their investment properties should consider a homeowner’s insurance policy. The cover for these types of premises can be much higher than the cover for retail properties, as there is more risk for the property itself in the event of damage. You will also need to take out emergency lighting in order to be able to see the property in the dark. Most policies will offer a replacement cost clause so that you will be able to replace whatever was lost in the unfortunate event of a fire or flood.
When you take out an insurance policy to protect your tenants, remember that you have responsibilities too. You must have the building inspected for any damages or problems by a reputable inspector before you allow anyone onto the premises. You must keep a record of all maintenance records for buildings you are renting out as well as copies of leases and rental agreements. You should always make sure that the terms of the insurance policy are kept current. By doing this you are proving to the insurers that you are serious about your business and that the risks associated with the type of premises you are running are understood and accounted for.