How does a landlord insurance work?

How does a landlord insurance work?

As a landlord of a residential property, you need protection from financial losses, which may result from a property damage due to break in, extreme weather or even break-ins. A landlord insurance provides coverage for property owners, who are renting out one or more residential homes, condos, and apartments.

There are insurance covers that can help you cover the loss of income in the event that your residential unit becomes uninhabitable due to circumstances that are beyond your control.

Landlord insurance protects owners from the damage to their property and from liability claims. Following are a few examples that would explain how landlord insurance work:

landlord liability example
Consider a scenario, where a visitor visits your property. While, on your property, if the visitor falls because he tripped over his own shoelaces, as the landlord you don’t have the liability claim on your hands.

If the visitor is staying with one of the tenants that the landlord has leased his/her house too, falls on a slippery floor, the landlord here as well is not likely to be held responsible. This incident will probably fall under the renter’s liability insurance.

The landlord might have a liability claim on their hands if the visitor tripped due to negligence on landlord’s part, such as broken stairways in the landlord’s building or icy walkways. The visitor may file a claim against your landlord insurance policy to cover the medical costs. The landlord insurance can cover costs up to limit of the policy after the deductible amount is paid.

Rental damage property example
Consider an event in which a lightning strikes an apartment and starts a fire causing a substantial damage. In cases like these, a landlord insurance can help one pay for the repairs or rebuilding.

You need to consider the fact that as the landlord, your property damage coverage has limits. Remember that you will have to pay for the deductible first before you get any reimbursement from the insurer. If your insurance covers for loss of income, you can be compensated for the rental income you might lose during repairs.
Ask the insurance agent if you can add coverage for tenant damage. If this is not possible, take a rental deposit when the tenant signs for lease.

To get more information and advice to find the right coverage that matches your insurance needs, get in touch with a local insurance agent. They can guide you in the right direction and might also provide you free landlord insurance quotes from different companies.