Whether you are renting out a house or an apartment, it is vital to have landlord insurance. Unlike homeowner insurance — which does not cover a property unless it’s occupied by the owner — landlord insurance is designed for rental properties providing security against income loss, natural disasters, and tenant-related damages. In addition, it also provides protection against liability claims.
Landlord insurance coverage may be designed according to your needs. Sunburst Properties can help you identify the best riders to add to maximize coverage. In the meantime, it pays to know why good comprehensive landlord insurance is important for rental property owners.
Protection Against Property Damage
Landlord insurance will cover a rental property damaged by natural disasters, fire, electric malfunction, and wind. It may also cover break-ins and tenant-related damages such as vandalism.
As you look for landlord insurance, pay more attention to plans that offer replacement costs rather than actual cash value (ACV). Often, insurance companies will only pay the amount of ACV, which you get by deducting depreciation value from the replacement cost of a damaged or stolen property.
It will be more practical to get replacement cost coverage for older properties.
Protection Against Rental Income Loss
A comprehensive landlord insurance policy typically costs 15% more than homeowner insurance. However, one of the advantages you get from paying extra is the protection against rental income loss. For example, if your property suddenly becomes uninhabitable due to severe mold damage, pest infestation, etc., you will receive temporary rental reimbursement for lost income.
Protection Against Liability Claims
Property maintenance issues can occur anytime and cause injuries to your tenants or their visitors. You should prepare against accidents due to icy path walks, architectural problems, and similar scenarios.
Liability coverage protects you from legal and medical expenses brought by this kind of issue.
Improved Coverage With Riders
Acquiring landlord insurance also allows you to adjust the policy according to what you feel you need most. Adding riders will maximize coverage and provide better protection. You may choose to add riders such as
- Guaranteed income coverage
- Emergency coverage
- Flood coverage
- Construction expenses coverage
However, it is worth noting that adding riders may require additional costs depending on what you include.
Available in Bundle Options
Some insurance companies offer bundle options. You can get discounts for purchasing landlord and homeowner insurance under the same company. This option is also known as multi-insurance.
Multi-insurance binds all coverages from different types of insurance plans under one contract.
Final Thoughts
Only landlord insurance provides the best protection for any residential rental property. You get financial security and coverage for income loss, property damage, and liability claims. You can even improve your policy to get maximum coverage and benefits by adding different types of riders to your plan.
Are you not sure how to maximize landlord insurance coverage? Our Sacramento property management company can help. Aside from insurance assistance, we design solutions according to your property portfolio to ensure business growth. Schedule an appointment today with Sunburst Properties.
