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Property Management Blog

Everything you need to know about Landlord Insurance

If you’re thinking about renting out a residential property, you may assume that your homeowner’s insurance will cover your basic claims costs. Unfortunately, this isn’t the case. You’ll need to consider looking into a more comprehensive insurance policy for landlords, especially when working with an Aurora property management company. These types of policies help ensure coverage for both short- and long-term tenants. They’ll protect your assets much better than a regular homeowners policy in the case of an accident or disaster. Keep reading to learn more about landlord insurance coverage and why you need it.

What is Landlord Insurance

Like home insurance, landlord insurance covers your basic property liability and dwelling coverage needs. It also extends to any damage left by your tenants or their pets on the property. So, why do you need landlord insurance if you already have a homeowner insurance policy? Many homeowner policies only extend coverage to the owners. Once you start renting out your residential property, this coverage will no longer apply. Landlord policies ensure that your assets will be covered if someone gets hurt on the property, an appliance malfunctions, or the property is damaged in a storm. There are even several different types of policies available, so you can choose the best one that suits your needs and budget.

What Landlord Insurance Covers

Every comprehensive landlord insurance policy provides protection for the following: Property Damage: Coverage for damage sustained to property and furnishings by natural disasters like earthquakes, fire, and storms, malfunction of electric or gas lines, theft, and vandalism, or tenants. Rental Income: Coverage for loss of rental income caused by an uninhabitable property or living situation for tenants. This could include an infestation of rodents or pests, mold, or a sinkhole. Liability Protection: Coverage for costs of medical bills or legal services from tenant or visitor injury on the property due to a maintenance issue or dangerous walking condition. What it doesn’t cover Although both homeowners and landlord insurance policies are similar, there are a few items that landlord policies don’t cover. Understanding these differences can help ensure that you get the coverage you need on your rental property.
  • Landlord insurance only covers rental properties with tenants. For example, it won’t cover your residential home if you still live there, but rent out one room.
  • Tenants will be responsible for purchasing their own rental insurance, as landlord insurance doesn’t cover their personal belongings.
  • Your landlord policy won’t cover basic maintenance and repair or any of your personal belongings left on-site.

The key takeaway

It’s best to review your current homeowner's policy before deciding on whether landlord insurance is right for you. However, some damage and liability coverage for residential rentals is not covered under a basic homeowners policy. Looking into a landlord insurance policy might be the best choice for your rental. Working with an Aurora property manager can make these choices much easier, as well. For more information regarding landlord insurance and property management options, contact Walters & Company Property Management.