Landlordinsurance is designed to protect the investment owners make in properties theyintend to rent out or lease to others.
It works inthe same respect as many homeowner insurance policies by offering protectionfor the structure of the home from specifically named events. Yet, landlordsinsurance policies are different in that they donot provide protectionfor the possessions of the tenants who rent the home or building.
If you have any questions or need guidance with your insurance needs, please reach out to us. We're here to help you find the right coverage: info@icnj.com.
Additionalprotections offered by the standard landlord insurance policy include:
- Toolsand other property used to serve the rental (equipment, lawnmowers, snowblowers, etc.) if selected.
- Otherstructures on the property (detached garages, storage sheds, etc.) if selected.
- PremisesLiability coverage
- Lossof rental income (protection for your rental income if you are unable to leasethe property while repairs are underway) for a covered loss.
Beforebuying landlord insurance for yourself, it is important to learn a few keydetails and factors to consider. Below summarizes what you need to know aboutlandlord property insurance and more.
Do You Need a Landlord Insurance Policy?
If you ownone or more properties you currently rent to others or have plans to rent toothers; then you need to purchase a landlord insurance policy. A landlordpolicy will protect your financial interests in the building and also provideprotection for a landlord’s premises liability exposure.
However, there are other types of protection landlords need for their rental properties that may or may not be covered by the most basic policies for landlord insurance. The better you understand the types of coverage available, the more effectively you can compare policy offerings to determine the best protection for you.
What Does Landlord Insurance Cover?
Differentinsurance companies offer varying degrees of protection in their landlordinsurance policies. It is important to make apples to apples comparisons basedon the coverage you’re getting and the overall costs of the policies. Inaddition to standard protection for the value of the home’s structure,additional structures, liability, and personal property, you might also lookfor some following types of coverage as well.
- Vandalism Protection. Repairs or replacesdamage related to vandalism.
- Building Code Protection / Ordinance or LawProtection.Provides protection for bringing the home up to current code if it issufficiently damaged to require updating according to local statutes.
- Theft Insurance. Provides protectionfor the tools and other property stored onsite that has been stolen.
- Equipment Breakdown Endorsem*nt. Reimburses paymentsyou make to tenants related to the breakdown of heating or cooling equipment.
- Non-Occupied Dwelling Endorsem*nt. Provides coverage forproperties that are unoccupied for more than 30 days — something traditionalinsurance does not provide.
- Multi-Unit Protection (if applicable). Provides protectionfor multiple units to landlords who have numerous properties. If all propertiesare listed on the policy.
These typesof protection are not generally covered by a standard landlord insurance policyand require additional protection or “rider” policies to receive this uniqueprotection.
What Doesn’t Landlord Insurance Cover?
It isequally important to understand the limitations of landlord insurance and tomake sure your tenants understand the limitations of the protection provided.Among the things not protected, or explicitly excluded in most landlordinsurance policies, are:
- Rental Property Under Construction. Provides additionalprotection of the structure until it is ready for occupation. Coverage for thiscan be provided by a Builders Risk policy.
- Shared property. This refers tosituations in which landlords live on the property and share it with others byrenting out one floor or a room on their home. Landlord policies are limited tonon-owner-occupied properties for the most part. Work with your insurer to findthe right protection to meet your specific needs, if this applies to you.
- Belongings and possessions of your tenants. It is important thatyour tenants understand that your insurance does not protect their possessions,and they should consider renter’s insurance to protect their belongings fromcovered perils, floods, earthquakes, and more.
- Floods, earthquakes, and sewer backups. Fortunately, there isspecific insurance protection you can purchase for these things, but it is notgenerally covered by your landlord policy.
- Tenant Discrimination Liability helpsto protect your business and personal assets from the costs involved indefending yourself against discrimination claims and the expenses of judgmentsawarded against you
The key isto work with an independent insurance agency, like Insurance Center of NorthJersey that has your best interests at heart and will help you get the rightkind of landlord insurance.
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