There’s no question that when handled correctly, rental properties can be a great way to generate a consistent revenue stream. And whether you’re renting out a room or an entire house, you’ll need to take steps to properly protect yourself and your finances.
There are plenty of different ways to go about doing this, but it’s often very easy to overlook some of the other options that are out there. In particular, you’ll want to consider landlord insurance if you’re serious about making sure that you are fully protected.
It’s surprising how many landlords aren’t even aware that this is an option, and taking a closer look at it is well worth doing for anyone – and could help you gain peace of mind and an extra layer of protection for your properties and your budget.
What Is Landlord Insurance?
You know what homeowners insurance is, and landlord’s insurance is somewhat similar. This type of insurance protects your property from damage, and will cover the expenses associated with repairs caused by various types of damage. Additionally, landlord insurance also protects you from liability issues if someone is hurt on the property.
Landlord insurance goes a bit further, providing you with protection as if your rental property was a business. Since you’re generating income from that property it can be treated as a business, which in turn brings you some additional protection when you invest in landlord insurance. Simply put, this is a type of insurance that landlords really can’t afford to ignore.
What Coverage Does Landlord Insurance Provide?
Landlord insurance covers the building and the property, just as a homeowners policy does. This includes damage that is caused to the structure and the property by things such as fires, vandalism, and more. Additionally, landlord insurance provides some other benefits including:
- Greater levels of liability coverage, keeping you protected from legal costs and action if someone is injured on your property.
- Income loss compensation if your repairs mean that you can’t rent out a room or a building
- Some policies may provide protection from damage done by tenants, though this is rare.
In short, landlord insurance provides you with a way to protect yourself and your investment throughout the future, and while it gives you financial and legal protection, it also delivers less stress and better peace of mind.
What Is The Cost?
The overall cost of landlord insurance is roughly 25% more than a comparable homeowners insurance policy would be. That’s largely because of the increased coverage it provides. Some factors that will influence the cost include:
- Location of property
- Age and condition of property
- Size of building
- Number of rental units
- Presence of a pool
- Security features that are installed
Along with this, the policy you choose will also influence its cost – more coverage size means more cost, obviously. Remember, however, that you can include this type of insurance as a tax write off and that the peace of mind and protection that it brings are well worth the costs of a good policy.