The First Step in Becoming a Landlord
The Rental Protection Agency states that over 500 people become landlords in the U.S. each day. Deciding to become a landlord by renting a property you own is a big decision; one thing you should seriously consider before you do anything else is landlord insurance. The professionals at Insurance by Castle are the right people to talk to about your insurance needs.
Landlord insurance typically provides two types of coverage, property and liability; both of which are in place for the sole purpose of protecting you from financial losses.
Your landlord insurance policy should include property protection which covers the physical property you are offering for rent and any equipment stored on site for the maintenance of said property. Your landlord insurance policy should include the following coverages:
- Dwelling- The dwelling coverage portion of your landlord insurance policy is there to protect the physical property you are renting from losses due to fire, lightning, wind, hail, or other covered events.
- Additional Structures- This portion of your landlord insurance policy is included to protect you from losses associated with things like your property’s detached garage, storage shed, fence, etc.;
- Personal Property or Equipment Used to Maintain the Property- Storing maintenance items such as lawn equipment, snow blower, or hand tools used to maintain the rental property are generally covered against loss or damage by this inclusion in your landlord insurance policy. Personal property such as your personal bicycle or a TV left at the rental property will typically not be covered by this provision.
Be aware, all insurance policies are subject to deductibles and limits which are set forth within your individual landlord insurance policy. The limit outlines the maximum amount the insurance company will reimburse you in the event of loss or damage. Deductibles and limits can vary by different coverages. You may be able to choose from several options on these when you set up your landlord insurance policy.
The liability coverage portion of your landlord insurance policy protects you in the event someone is injured on your property and you are found to be responsible. An example of this is, if your tenant or one of their guests were to fall down the stairs and suffer injuries, you could be held responsible if it is proven the stairs were not properly maintained. You could then be held responsible for the injured party’s medical, legal, and other expenses. The liability provision of your landlord insurance policy would protect you from incurring these expenses “out of pocket”. Typically, deductibles do not apply to liability claims.
Some other coverages you may want to consider when designing your landlord insurance policy include:
- Vandalism and burglary
- Personal umbrella policy
- Rental property under construction
- Building codes
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