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What Is Landlord Insurance and What Does It Cover?

By Jarrod Heil

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If you’re looking to become a landlord, there’s more to it than simply buying an extra home, putting it up for rent and collecting a paycheck each month. You’ll have to work hard, and you’ll need to protect your investment with a landlord insurance policy.

There are many perks to becoming a landlord. But before you allow your first tenant to move in, you need to realize the tentative downsides it can have, too. You’re allowing someone to move into your rental property who’s far less invested, monetarily and emotionally, in the property. While you may take care of your home, they may not take care of yours.

Becoming a great landlord doesn’t stop at fixing maintenance issues when requested. It extends to protecting your rental home. From what is landlord insurance to what it covers and the differences between loss of rental income, landlord liability insurance and contents coverage, this is everything you should know about renters insurance!
 
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What Is Landlord Insurance?

Landlord insurance is similar to homeowners insurance in many ways. It can also differ because many contents inside your home are the property of your tenants, not yourself. In layman’s terms, a landlord policy is a policy that helps you protect each rental property you’ve worked so hard to purchase. Property and liability protection allows you to avoid financial losses in the case of a covered peril.
 
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What Does Landlord Insurance Cover?

A landlord insurance policy protects against covered damage or destruction to the home you rent out, any other structures on the property that you own and personal property that may be used to maintain the rental property. Extras can be added on to include loss of rental income, unavoidable construction costs and protection against burglary and vandalism.

Dwelling & Other Structures

Landlord insurance, also called rental property insurance because of the protection it provides for the entire property which your rental resides on, covers damage and destruction to the rental home and any other structures on the property due to a covered peril.

Dwelling and other structures coverage helps to pay repair or replacement costs for your rental home and structures like a shed, fence or detached garage. Covered perils include lightning, hail, hurricanes, tornadoes and many other events listed under common homeowners insurance policies.

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Maintenance Materials

Your lawnmower, tools or any other item that aides in repairing or maintaining the property that is kept on the property itself are covered. Unfortunately, things like dishwashers and laundry machines don’t qualify as maintenance materials, so they aren’t covered.

Landlord Liability Protection

Oftentimes mistaken as landlord liability insurance, landlord protection is additional coverage to your policy that helps pay for medical expenses or legal bills if someone is injured on your rental property and the court of law deems it your fault.

This coverage protects you if a tenant falls down the stairs and injures themself due to failure of maintenance, such as a faulty railing or jagged stairs that aren’t built to code. Accidents happen, so it’s best to be prepared.

Related ArticleHome Insurance Coverage E: What Is Liability Coverage?

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What Additional Landlord Insurance Coverage Is Available?

Like many things in life, settling for the basics can lead to more long-term problems than short-term gains. The best landlord insurance policy will have a few or all of the following coverages:

Landlord Contents

If you plan on partially or fully furnishing your rental property, you’ll want to opt-in to landlord contents coverage. It protects property owned by you that’s inside your home — like couches, rugs, tables and chairs — from damage or destruction caused by a covered peril.

Burglary & Vandalism

Damage from burglaries are covered, but theft from burglaries are not covered by basic rental home insurance policies. In addition, damage from vandalism is typically not covered either. Both coverages can be added to enhance your overall landlord insurance policy.

Construction

If you’re renovating or making additions to your home and you realize building codes have been updated, leading you to spend more to meet code, additional coverage to help pay those expenses could come in handy.

Loss of Income

If your rental property was deemed uninhabitable due to damage or destruction caused by a covered peril, loss of rental income insurance will kick in and pay you the amount of money you would’ve been receiving in rent each month. That can add to up a lot of money if your property sustains extensive damage.
 
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What Does Landlord Contents Insurance Cover?

If you rent out a furnished home, landlord contents insurance covers any items you directly use to furnish your rental property. This can include furniture, washer and dryers, large appliances and TVs but usually doesn’t extend to smaller electronics.
 
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Does Landlord Insurance Cover Tenant Damage?

Yes, landlord insurance does cover some instances of tenant damage, but it doesn’t cover any damage to your tenants’ personal belongings. For instance, if your tenant accidentally starts a kitchen fire and damages your home, that would be covered.
 
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What Does Landlord Insurance Not Cover?

There are many misconceptions about what a landlord policy covers and doesn’t cover, so here are a few things that aren’t covered:

Appliances

Dishwashers, laundry machines and furnaces are not covered by your landlord policy if they break down and need to be repaired or replaced.

Tenants’ Personal Property

The tenant is not on the insurance policy, therefore, their belongings and wellbeing are not covered. To be safe, you may even want to require your tenant to purchase renters insurance.

Shared Property

If you rent a portion of your home, or even a single room, landlord insurance typically doesn’t cover anything because they’re used to insure properties that aren’t occupied by the owner.
 
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Getting a Landlord Insurance Quote Online

Getting a landlord insurance quote online is easier with Clovered. Our online quoting tool compares policies and prices from many different insurance carriers and pairs you with the best landlord insurance policy that meets your needs — and doesn’t cost an arm and a leg.

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