Landlord Policy For A Rental Property
Landlord insurance is designed to help protect individuals or LLCs who own Residential Rental or Investment Properties from the risk associated with renting that property.
Homeowners Insurances vs. Landlord Insurance
A common misconception is many people think any type of insurance policy for a residential building is called homeowners insurance. Another misconception is many people think they don't need a new policy if they move out of their home and rent it to another individuals or individuals. Both those misconceptions are false.
If you no longer occupy the property as your primary residence nor is the property a secondary/seasonal residence (not rented too others), then you need another policy.
Landlord insurance, referred to as a dwelling fire in the insurance industry, is a policy for someone who rents out a residential property they own. A dwelling fire policy typically includes three main types of coverages: property , loss of rents and liability protection. These coverages are very important and intended to protect you from financial loss.
Though it is commonly referred to as a dwelling fire, the policy covers more than just a fire loss. It pays if your house is damaged or destroyed by a "Covered Loss".
The summary below highlights the notable coverage and exclusions associated with a dwelling fire insurance policy and is only provided as guidance in helping you understand the policy.
Loss of Rents
Fair Rental Value pays your loss of rental income if your tenant must temporarily move because of damage to your rental property by a covered loss. This allows the focus to remain on repairing the property and not on financial hardship due to loss of rental income.
Personal liability pays to defend you in court against certain lawsuits and provides coverage if you are found legally responsible for someone else’s injury or property damage. Remember, as a landlord you are responsible for what happens on your property, and can be held financially accountable if not properly insured.
Other Policy Features
• Companies may exclude coverage for certain losses. Even the most comprehensive policy will exclude certain types of damage.
• All policies include an all-peril deductible. The deductible is the portion for which you are responsible on a covered property loss.
• Some policies may include a separate, optional wind/hail deductible, and/or a mandatory or optional hurricane deductible.
• Companies may offer optional coverages that include oil tank liability, coverage for water back up and sump pump overflow, ordinance or law coverage, theft, loss assessment, earthquake, gravemarkers or sinkhole collapse.
Ready to rent out a property you own to tenants? Call us now at 201-340-4080.
Hope this helps!
"Disclaimer: The content contained in this blog is for informational purposes only. It should not be considered insurance advice since every client's needs and circumstances are different.. Bergen Insurance Group, LLC makes no representation as to accuracy, completeness, currentness, suitability, or validity of any information on this site and will not be liable for any errors, omissions, or delays in this information or any losses, injuries, or damages arising from its display or use. All statements represent the sole opinion of the author and is provided on an as-is basis. For an actual description of all coverages, terms and conditions, refer to your insurance policy.”