When you rent out property, you might hear about landlord insurance. You may wonder if you need landlord insurance, what it covers, and how much you should have. It protects you against financial losses from tenant-related incidents, such as property damage, unpaid rent, and legal liabilities.
Neglecting to have adequate landlord insurance could leave you vulnerable to costly repairs, legal battles, and potential financial ruin. This blog will help you understand all about landlord insurance. Knowing about landlord insurance is crucial whether you’re a new landlord or have been renting out property for years.
What Is Landlord Insurance?
Landlord insurance is a type of coverage that helps property owners manage risks associated with renting out their property. Unlike regular home insurance, which covers your residence, landlord insurance covers explicitly rental properties. It helps protect your investment from various risks like damages, lawsuits, and loss of rental income.
What Does Landlord Insurance Cover?
If you need landlord insurance, it typically includes several types of protection. How much landlord insurance you need depends on factors like:
- The value of your rental property
- The number of units
- The location
These are some examples of what landlord insurance may cover:
- Property Damage: This part of the policy covers damage to your building from a fire, storm, or vandalism. It helps pay for repairs or rebuilding if something goes wrong.
- Flood insurance: Standard landlord insurance policies often exclude flood damage. Adding flood insurance is advisable for properties at risk of flooding from natural disasters or plumbing failures. This coverage helps pay for repairs and restoration if your property suffers flood damage.
- Liability protection: If someone is hurt on your property, this helps pay any legal costs or medical bills if you’re found responsible. It’s essential for protecting yourself against lawsuits.
- Loss of income: This compensates you for lost rent if your property is uninhabitable due to damages from a covered loss. It covers the gap while you make repairs.
- Guaranteed income: This is landlord insurance you need if you rely on rental income for expenses like mortgage payments. It covers losses when tenants fail to pay rent fully, helping maintain financial stability despite tenant issues.
- Emergency coverage: As a landlord, emergency coverage helps handle urgent repairs or tenant issues like broken appliances or lockouts. It covers costs like travel expenses, resolving problems quickly, maintaining good tenant relations, and efficient property management.
- Additional construction: Updates may be required to meet current building codes when repairing a damaged building. This pays for making these mandatory upgrades during repairs. It may be suitable for older properties needing significant electrical, plumbing, or structural updates.
Is Landlord Insurance Required by Law?
In both New Hampshire and Vermont, there is no landlord insurance requirement by state law. However, there are some instances where you may need to fulfill landlord insurance requirements. If you have a mortgage on the rental property, your lender may require you to have landlord insurance as part of the mortgage terms. This protects the lender and your investment in case of damages or loss.
Protect Yourself Against Potential Losses
Landlord insurance is advisable to protect against financial losses from property damage, liability claims, or lost rental income. Work with our professionals to help you find a suitable policy for you.
Learn more about our landlord and rental property insurance policies today.
