Are you a landlord? If you are, you know that you could take a huge financial hit if your property is damaged. Landlord insurance helps to protect your finances against loss if damage occurs due to natural disaster, tenant damage, fire, or even terrorist acts. This not only covers just the living space. It also covers garages, backyard sheds, and other personal possessions of yours that are there at the rental property, including appliances and any tools.
Understanding what is covered by the insurance is essential to make sure that you are fully protected. Some of the situations that are most common to happen to a rental property include:
- Natural disaster, including a tornado, flood, or hurricane
- Damage unintentionally caused by you
- Arson related property destruction or damage
- Tenant damage that causes the property to be unlivable
There are different components to your homeowners insurance that can help to protect you and your property. Liability coverage will defend you against a liability claim in the case of an injury on the property. If the landlord is found liable for an injury, the insurance will pay up to a specified insurance limit that is set in the policy.
If your property becomes unable to be lived in, this insurance can help to protect you against loss due to not receiving rent payments. Payments will be made to you at the amount you would have been paid in rent. This can be a big help if a tenant damages the property and you have to make repairs to make it livable for a new tenant.
Some homeowners policies even feature protection against inflation. Rising costs can have a huge effect upon how much you have to pay for repairs or maintenance. Your insurance policy can absorb some of these costs to decrease your personal financial effect.
Whether you have just one property or a dozen, you need to have homeowners insurance. You can have them all covered under one policy or you can choose to get a policy on each property. The key is to have coverage to protect these assets, as well as your own personal finances.