The Details and Costs of Landlord Insurance
Regular home insurance policies will usually keep you covered when it comes to many of the potential problems and risks associated with homeownership.
However, the extra liability associated with owning a rental property and renting it out to one or more tenants can create other problems, many of which will not be covered by these standard insurance premiums.
Another type of policy called landlord insurance is provided by numerous insurance companies to account for the additional coverage needed when you’re dealing with the unpredictable nature of a rental contract and the additional issues involved with tenants.
The Risks Involved in Renting Out Your Home
When renting out your home, there can be many potential risks and problems you may not have accounted for, especially if you’re not accustomed to this type of real estate investment endeavor.
Most Florida homeowners will only think about unforeseen dangers to the property itself caused by events such as floods, hurricanes or fires. Nevertheless, when you’re renting your home to people you hardly know, there can be other risks you may not have thought of.
There can be a lot of problems associated with your rental income and the down payments you ask for when presenting a new tenant with an offer. Also, theft can be more common, and you can expect to pay more than average on refurbishing and repair tasks – in which case there are risks such as loss of property, as well as damage and abuse brought to new furnishings.
Landlord Insurance
Whether you’ve recently bought and insured a home or you’ve been using the same homeowner’s policy and are now ready to become a landlord, the best course of action is to talk to your insurer about a landlord policy.
Landlord insurance is far more specific than regular homeowner insurance, providing adequate coverage for many of the risks that you may face as a landlord in the following months and years:
- All risk coverage – for damage caused by hurricanes, storms, fires and other natural disasters – as well as typical coverage for earthquakes and floods;
- Loss of rent coverage – usually requiring you to report the losses within a limited period and for the deficiency to be reported separately;
- Emergency assistance coverage, dealing with the need for immediate repairs or maintenance;
- Losses occurring as a result of down payments;
- Lost rental income from damaged houses that become uninhabitable until the damage is repaired.
An important detail about landlord insurance is that, apart from reading the fine print and examining the policy in detail to find out about any specific limitations, you also need to pay attention to optional coverage you may not require.
For instance, if you’ve bought a new property, you will have no need for builders’ risk and construction coverage, which will only cover specific losses for incomplete buildings that are still under construction.
Also, considering the cost of landlord insurance, expect to pay about 15-20% more than you would on a regular homeowner’s policy – although this is not necessarily a rule, since each insurance company has its own agenda and set of rules when it comes to their premiums.
Searching for free quotes online or calling a trusted insurance company to find out more on the subject is the best way of getting a great deal on your new policy. Also, our experts, here at Realty45 Inc, will be more than happy to recommend a few reliable providers you can contact.
