Property owners who rent out their homes to tenants need a different type of insurance, called landlord insurance. Traditional homeowners’ insurance only covers owner-occupied properties. When a property is rented out, homeowners’ insurance no longer applies. Here are some steps to help you find the right landlord insurance for your needs.
Why Landlord Insurance is Important
Landlord insurance provides coverage for the home, any unattached structures on the property, and your personal property. It also includes liability coverage and loss of rental income if your property is damaged by a covered event, such as a fire, and you are unable to rent it out. However, landlord insurance does not cover tenants' personal property or damages caused by tenant neglect. Additionally, natural disasters like earthquakes, erosion, and mudslides are typically not covered unless you add specific coverage.
Cost of Landlord Insurance
On average, landlord insurance costs about 25% more than standard homeowners’ insurance. The location of your property also impacts the cost—areas prone to vandalism, theft, or natural disasters generally have higher insurance rates. Since different insurance companies offer varying prices, it’s important to collect quotes from multiple providers to find the best deal.
Choosing the Right Policy
Be sure to review several policies to ensure you select the one that best suits you and your rental property. It’s crucial to find a policy that meets your needs and provides comprehensive coverage for potential risks.
