If you’ve made the decision to become a landlord, you’re embarking on one of the best ways to make a steady, reliable income that also provides a much needed public service. You are providing housing to those that need it, but can’t necessarily pay the amounts required to own a home. If you’ve chosen your location well, and keep your property in good condition, this is a very smart investment that will continue to generate revenue for you for years to come.
When you make the decision to start renting out properties, you have a whole new set of considerations to think about, and one of them is getting liability insurance. Here’s why.
Home Insurance Is Not Tenant Insurance
When you own a home, obviously you will get insurance for that home, and that doesn’t change if you decide to become a landlord. However, the type of protection that you receive from normal home insurance is very different from what liability insurance coverage provides.
Normal home insurance is about protecting your home from threats that come from the outside, such as flooding, storms, or fires. Home insurance works under the assumption that, as the homeowner, you are doing everything in your power to keep your home and the residents inside it in good working condition. This means that if anything happens inside your home, such as a child accidentally getting access to a hammer and putting holes in the walls, home insurance will not cover this, and you will be expected to pay for repairs yourself.
The same holds true if you only have home insurance, but you make the mistake of renting your property out to tenants.
Safety for You & Your Property
When you decide to rent your property to tenants, there is one thing you are giving up, and that is control. As the tenant, someone taking up residence in your property can decorate it however they like, entertain any guests they choose, and clean up the property—or not—as they see fit. In most cases, with careful tenant selection, this isn’t a problem as the majority of people looking for a place to live treat a new property as their home and give it the care it deserves.
Some, however, do not. Without liability insurance coverage, if relations between you and a tenant go sour, and the tenant retaliates by damaging the property or has guests that do the same thing, liability insurance can protect you from this. While no one wants this type of thing to happen, tenant damage to a property can be as inconvenient as flushing sheets down the toilet to block plumbing until an expensive repair can be conducted, or as serious as arson.
Protect Your Tenants
Liability insurance coverage isn’t just for you, though. It can also be for your tenants and their guests in the event that you are not observing all your responsibilities as a landlord. As one example, if the steps leading up to your property are in a bad state of repair, it’s possible someone can slip and fall on them. If you are aware of this problem but continue to do nothing about it, then in the event of an injury by a tenant, their guest, or even someone doing their job such as a postal worker, you may be liable for a negligence lawsuit.
Liability coverage can cover these events as well, and prevent landlords from being directly financially responsible for the repercussions. If you’d like to know more about what liability insurance coverage can do for you, contact us. We’d be happy to help and answer your questions at 800.644.6443.