Landlord insurance is an essential ingredient to the success of your investment property. All investments come with some element of risk. In this case, you are entrusting your tenants to live in your property. What if something goes wrong? Here’s where your landlord insurance steps in. It will protect you against damages, cover loss of rent and help with legal expenses.
There are a few other insurances landlords can purchase for their property. Including building insurance, which generally protects the structure of the property. Along with contents insurance, which protects any furniture or appliances you have at the property. For this article, we are going to focus on only landlord insurance.
Disclaimer: As each insurance policy varies slightly, this article is of general nature. Please check your insurance policy to ensure you are covered.
1. Protects against damages
Even with the best tenants, sometimes damages at the property can’t be prevented. Accidents do happen, we’re all human. But without landlord insurance, you as the landlord will be left to pick up the pieces. Having landlord insurance will help the repair process be smoother and faster, so you can get back to leasing out your property sooner.
2. Covers loss of rent
Your rental property is another stream of income. Having landlord insurance will help cover loss of rent you encounter if your property becomes inhabitable or if a tenant defaults. This is one of the biggest benefits of having landlord insurance. As you won’t be out of pocket if one of these events were to happen.
According to Terri Sheer Insurance, other events that are covered for loss of rental income include:
- Defaulting tenant
- Failure to give vacant possession
- Death of a tenant
- Untenantable property
- Prevention of access
- Rent reduction
Helps with legal expenses
In the unfortunate event that you need to evict a tenant, you will need legal assistance. Your insurance policy will outline how it can help cover some of the costs to take action against your tenant. Without landlord insurance, this could be a hefty cost to you.
Landlord insurance is definitely worth it. It’s a small price to pay in the short term to safeguard you if anything were to ever go wrong. There are different types of landlord insurance such as building and contents you can also purchase for your property. As each policy varies slightly, please be sure to check yours to see what’s included.
Click here to see what events are covered in landlord, contents and building insurance.