The Vicissitudes of Renting Out Your Real Estate: Why You Need Landlord Insurance
My husband and I were fortunate enough–or unfortunate enough–to become landlords while still in our 20′s. We got pregnant a bit earlier than we’d really planned to : ) At the time we lived in a ‘culturally interesting’ but highly ‘volatile’ neighborhood, and with a baby on the way we decided to move. This was after the real estate crisis and we decided that instead of selling our house, we’d rent it. That was the beginning of many adventures. We’ve added a few other homes to our ‘mini-empire’ and each one of them has a rich history of funny, sometimes horrifying, blood chilling stories!
One thing we’ve definitely learned–aside from drywalling, caulking and more than we ever thought we’d need to know about HVAC systems–is that if you’re going to rent your home, you need Landlord’s Insurance.
You may have acquired a new home but have decided to keep your former residence, or maybe you wanted to really sell it but with the real estate market not really a seller’s market right now, you’re stuck with your old home. Whatever the reasons are for keeping your old residence, you can earn money off it by renting it out.
Renting out your home is a sure way of getting profits from a property that you have. But if you do decide to put up your home for rent, you should look into getting a landlord insurance.
If you think that a homeowners insurance is enough to cover you when you rent out of home then you’re sadly mistaken. It offers a different set of features to cover you from landlord insurance. For example, a homeowners insurance will give you coverage for fires, break-ins and medical and legal fees in the event someone gets injured while in your property. It may sound comprehensive but homeowners insurance does not usually offer this protection if the house has been rented to tenants. Homeowners insurance has specific statutes for coverage. If these are not met the insurance will no longer cover your home, and one of these statutes is usually that the owner cannot rent out his home.
Landlord insurance provides coverage for your home when you have it rented out. It covers not just the main house but also other structures that are in the property and any possessions of the owner that is still inside the property. The insurance protects you from any damage that tenants may inflict on the property and any accidents or injuries that will happen to tenants or visitors while in your rented home. You can also get additional coverage for certain landlord-specific problems (these are usually add-on covers that you can add for an additional amount on top of your insurance payments). Among the additional coverage include coverage for any lost income in case a tenant fails to pay his rent or when the property gets damaged or become uninhabitable (for example, in case of fire damage), coverage for any legal fees in case a dispute with a tenant leads to a court case, and coverage for expenses that will be incurred if the tenants need to be evacuated out of your home because of damage to the property.
To get the best possible landlord insurance policy you’ll have to do your homework and look at the different policies offered by insurance companies. Get the one that offers more features and possibly with a lower insurance premium.