Landlord insurance protects landlords from financial losses connected to rental properties that they own. Not carrying enough or any coverage could lead to financial catastrophe in certain situations.
Most policies will cover damage caused by several types of natural disasters. Other types of events that may be covered include terrorist acts, intentional damage by a tenant, and damage caused by fires. Along with apartment buildings or other types of rental properties, this type of insurance can also cover garages, sheds, and all of the landlord’s personal possessions that are on site, including tools and appliances.
Here is a list of some of the most common situations in which having this insurance will protect landlords:
•A major natural disaster that causes property damage, such as a hurricane, flood, or tornado.
•Property damage or destruction due to arson.
•The property becoming unlivable and/or becoming abandoned by its tenants.
•Property damage unintentionally caused by the landlord.
Another important aspect of landlord insurance is liability coverage. Often, a landlord’s insurance policy will protect him or her in the event of a liability claim. If the landlord is found responsible, the liability will be paid up to the insurance limit. If a residence becomes unlivable, a landlord policy might protect them from the losses they would normally incur due to the loss of rental income. The insurance will pay out the amount that the landlord would have received in rent.
Some policies will also feature inflation protection. Many landlords struggle to keep up with inflation. Rising prices increase the cost of repairs and maintenance. If a landlord has multiple properties, he or she can decide to have them all covered under the same policy, or have each one covered by its own policy.