Insurance for landlords can be virtually a necessity for owners of one or multiple rental properties in which tenants live. This type of insurance plan provides the policyholder superlative protection from financial loss should his or her rental property be damaged or somehow made uninhabitable. It is important to note that homeowner’s insurance will not provide protection from damage that occurs to a rental property and it won’t extend financial compensation for personal liability claims. It is not required by law to have this kind of coverage, but it is certainly wise to investigate obtaining a certain level of coverage of this insurance for the many kinds of rental properties.
Landlord insurance can cover all kinds of rental properties, including single-family homes, duplexes, and even entire apartment buildings. A basic landlord policy generally offers three types of coverage a rental property owner will need:
• Liability: This is the coverage that financially protects the landlord from various kinds of litigation and liability claims. For example, if a visitor, (or even a trespasser), is injured on the property and a lawsuit is filed, then this liability protection will compensate the landlord for whatever losses incurred.
• Property Damage: This is what safeguards the building structure itself and any personal property within it. This would include such things as electronics, like big screen TVs or computers, appliances like a stove or a refrigerator, etc. It also safeguards the landlord from such actions and events as theft, fire and severe weather, destruction caused by a tenant, and even vandalism.
• Income Loss: This is coverage that pays out for lost income should the rental property become uninhabitable as a result of any covered loss.
There are certain costs that will not be covered by your landlord plan. Coverage will not extend to equipment breakdown or for maintenance, for instance. Tenants’ belongings are also not covered and is the responsibility of the tenant via rental insurance or his or her own funds. Understand that to be eligible for a landlord policy, the landlord generally cannot live on the covered property.
Keep in mind that landlord coverage can be significantly cost-saving in protecting what can be a huge investment. It also ensures that a property owner will not be personally responsible for out-of-pocket costs due to damage that happens to the property. Premiums can even be tax-deductible as a business expense, though be sure to consult with a tax professional to determine if this holds true under the latest changes in the tax code.
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