Don’t be fooled, just because your tenant has rental insurance doesn’t mean that you, the owner, are protected. Rental property insurance is specially designed to cover the risks faced when you rent your property to others.
Unlike homeowners insurance, rental property insurance, also called landlord insurance, covers the unique risks taken in renting out your home or condo for extended and long periods of time. The coverage includes property damage, liability costs and loss of rental income for landlords renting their property. Whether you are renting your house, a vacation home or an investment property, rental property insurance is an important safeguard against the financial risk associated with tenants living on your property.
In addition to damage to the building itself and your personal property (such as included furniture), rental property insurance often covers lost income if property damaged means you can’t rent it out for a period. The policy will also often include coverage for liability you might face if a tenant sues over injury suffered in the property.
Unlike renters insurance, rental property insurance does not cover the personal property of tenants inhabiting the property. However, rental property insurance will often include coverage for items left onsite by the landlord. For example, if you left a lawnmower at your rental house and it is damaged by a fire – and fire is included in your policy – damage to the machine would be covered by your rental property insurance. On the other hand, if your tenant bought a personal air conditioning unit that is damaged by the same fire, the AC unit and the rest of the tenant’s property would not be covered by your rental property insurance but by the tenant’s renters insurance policy.
Other covered risks can include any costs you have to pay to move a tenant in or out of the property in the case of any necessary repairs – and any compensation you have to pay to a tenant if damage puts heating or air conditioning out of action.
One point to watch is the fact that policies usually don’t cover loss of income if a tenant fails to make rent payments, or the costs of evicting a tenant if necessary.
If you’ve got any questions on rental property insurance or want to find the best policy, contact us today.