Do you currently rent out a home or apartment?
Considering that it’s estimated that there are 2,654 people entering the rental market every day, it’s a pretty steady business to be in.
There aren’t too many downsides to being a landlord. After all, if you have good tenants all you need to do are the occasional repairs in exchange for a check at the end of the month.
Renting out property can be easy money for some, but it’s not all fun and games. Landlord insurance should be an essential for anybody that rents any kind of property, even if you mainly deal with vacation homes and flats.
Why You Need Landlord Insurance
You might think you don’t need Landlord insurance because you already have homeowners insurance. Most are surprised to learn that their homeowners insurance is very different from a landlord policy.
Landlord insurance will cover a very specific set of instances that most homeowners policies won’t. In fact, many homeowners insurance policies won’t cover certain things if the property is being rented out.
There are a variety of reasons why you should consider a special kind of insurance if you’re a landlord. After you read this post, you’ll be trying to convince some of your friends that casually rent out property to invest in a policy of their own.
The Risk Is Too Great
If there’s one reason why everyone that rents property should get landlord insurance, it’s because of the risk. Even if you rent out to trusted family members or friends, there’s still too great of a risk when you rent out your property.
When we talk about risks, we aren’t talking about a renter deciding to leave without a trace. As a landlord without proper insurance, you’re putting yourself at a high risk of running into legal problems.
A renter could see themselves as a handyman and end up breaking something important they were trying to “help” fix. If you didn’t have the proper insurance policy, you could find yourself having to pay hundreds or thousands to repair something.
Sometimes the legal risks may not even come from the tenants themselves. They may have a guest over that could cause damage to property. Someone invited over could slip, fall, hurt themselves, and sue you because it’s your property.
Don’t make the mistake of assuming that everything will be “fine” when you start to rent. Mistakes happen and things can get broken, that’s why you need to do what you can to protect yourself.
It Can Help With Legal Problems
Let’s say that one of the above bad scenarios ends up happening to a renter on your property. What would you do if you had to handle a lengthy legal battle?
If you received notice of a lawsuit today, would you have the money you’d need to hire a lawyer to represent you? Would you even know what kind of legal aid you’d need to properly represent you?
Lawsuits and legal problems have bankrupt landlords in the past, and without the right coverage, you could find yourself in a difficult situation. As stated before, many homeowners insurance policies won’t cover incidents that occur with renters, and if you go to court you shouldn’t expect much help from your carrier.
Did you know that many landlord insurance policies have something called a “duty to defend” clause? That means that they’re legally obligated to help provide funds to help you in case you find yourself in legal trouble.
It’s a Great Protection Against Theft
You just rented out a gorgeous house to a family that seems very trustworthy. Nothing raised any red flags when you were looking at their application, and they seem like they’d be great renters.
They let you know suddenly that they need to break their lease, but because they’ve followed the right procedures you let them out of the agreement. After they leave you to decide to walk through the house, and you can’t believe what you’re seeing.
The entertainment system you left them is missing. There’s no TV, speakers, or even the computer you left around for safe keeping. You file a police report, but since you have no idea where the old renters are headed there’s almost nothing you can do.
This is a nightmare scenario for most people, but people with landlord insurance wouldn’t have to worry. This kind of insurance policy protects them against theft, and can easily reimburse them for anything that was taken.
It Helps With Damages Too
When it comes to renting, there are a few worries nearly every landlord has. Damage to property is one of the most common concerns people have, and for good reason.
There’s only so much a landlord can do when it comes to seeking reimbursement for damages. The security deposit that was agreed upon may not be able to fully cover extensive damages. And if you can’t find a way to contact the renters to settle on more money, you’re left with paying a lot of out of pocket costs.
Landlord insurance can help ensure that you aren’t left holding the bill in case anything goes wrong. A good policy can help cover the repair costs for damages so you have to pay less out of pocket (if you even pay at all).
Protect Yourself Against Income Loss
Did a storm blow through the area that left your rental property uninhabitable? Was there a fire or a different problem that makes your property unrentable?
People without proper coverage would have to scramble to find a way to make up for lost income, but people with landlord insurance wouldn’t have to.
Many kinds of landlord policies have coverage in case there’s a loss of income. You won’t have to worry about being able to make ends meet in case something happens to your property. The insurance will cover it!
Has landlord insurance helped you out in the past? Tell us about it in the comments! If you have any questions about insurance policies, please contact us so we can help!
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