As a landlord, you may face numerous risks associated with your rental properties. For example, the property could be damaged by your tenants or destroyed by a fire or flood. Your personal items in a rental property, such as appliances that you own, may be damaged in one of these devastating events. You may have a significant amount of financial equity in your rental properties, and the last thing you may want is to risk losing this equity. Landlord insurance is available to minimize the risks for financial loss that you may face.
Landlord insurance may cover the property itself and the contents inside of the building that you own. It also may provide loss of rents benefits in the event your tenants must move out unexpectedly because of severe property damage. Typically, this type of coverage is in the amount of the replacement value of the rental property, and the land that the building sits on is not included in this value. You may be able to assign a specific value to the contents that you own inside the building, but you may be required to document the value of damaged items when filing a claim. Furthermore, the loss of rents coverage typically extends only for a limited period of time, such as for 30 days.
Many of these policies also include a liability component. There is always a chance that you may be held financially responsible or sued for events that occur on your property. These may be events related to injuries on the premises, loss of life, loss of personal property and more. Your liability component of this type of policy may pay for legal expenses as well as any damages that you are responsible for.
As financially profitable as owning rental properties can be, there are significant risks that you may face as well. It is important that you understand what these risks are and what their impacts may be to your life and finances. Coverage is available to protect you from related losses, and now is the time to set up a protective policy that is right for you.