Whether you are the owner of a residential or a commercial property, if you plan to rent it out, it may need a lot of work for upgrades, and there are many risks involved. It’s best to buy suitable rental property insurance for the much-needed protection to your property and tenants. This insurance coverage will protect your property and ensure that income keeps flowing in case of a loss.
Coverage provided by your insurance policy may vary from one provider to the other. Still, most of them provide coverage to the property structure, property contents owned by the landlord, loss of rent, and liability coverage.
Most of the coverage offered is similar to homeowners’ insurance, though with a few unique features accounting for the tenants in the property. Expect the following coverage areas from your rental property insurance.
Property Structure Coverage
Insurance for your rental property covers any physical damage done to your property’s structure. For instance, any damage to your property’s roofing, flooring, or walls will be covered by the insurance provider. You may make a claim immediately after the damage through your independent agent and get the desired compensation.
Coverage for the Contents Owned by the Landlord
Unlike a renters’ insurance policy, this insurance covers any personal property in the structure owned by the landlord. If you have left something on the property, it will be covered by your insurance policy.
For instance, if you have left a shed at the property you have rented, and if it gets damaged in a fire, then your insurance policy will cover its damage, provided that your insurance plan has fire covered as a peril. While shopping around for your insurance policy, check whether it provides such coverage or not, and to what extent.
Liability Coverage
This type of coverage in your insurance policy will cover any medical or legal costs in case someone gets injured on the property you rented out. If your visitor or tenant gets injured on your premises, then it will be your responsibility to pay for their treatment, and your insurance policy will be able to handle it on your behalf. However, there may be a breaking point to the extent of liability coverage your insurance policy may offer. Check it before choosing an insurance policy for rental property.
Coverage for Loss of Rent
In case your rented property becomes uninhabitable for some time because of a covered reason, then the insurance policy will pay your rent for the loss of income.
For instance, if your insurance policy covers fire as peril and if your property becomes uninhabitable due to fire damage in it, the insurer will pay you for the loss of income you incurred due to no tenant in your property.
However, this rent is paid for a limited period of time only, until you get your property repaired and find another tenant for it. Remember, all insurance policies do not cover income loss, and you need to check with your insurer before purchasing a policy.
Optional Coverage
Apart from these, some insurance providers also provide extra coverage that you can buy along with your insurance policy. These may include coverage against vandalism, burglary, renovation, building codes, etc.
So, these are some of the coverage types provided by rental property insurance policies. However, be sure to check whether the policy offers these coverages or not and see if you want to opt for other optional coverage types as per your requirements.
The more coverage you demand, the more premium you will have to pay. It would be better to get in touch with a reliable insurance agent who can help you choose the best policy as per your needs and preferences.
