Standard landlord insurance does not usually include rental income that is lost during periods without tenants. In some cases, landlords may purchase rental loss insurance separately or as a rider. Insurance may extend beyond losses resulting from a natural disaster to any rental loss event. Most landlord insurance policies cover loss of rental income, which can occur after a property is temporarily uninhabitable due to covered damage, such as vandalism or flood-related damage.
Like a traditional landlord policy, landlord insurance offers several important types of coverage. It is the tenant's responsibility to cover his or her own personal property and liability, preferably with a renter's insurance policy. You should be aware that landlord insurance coverage has a limit, i.e., the maximum amount of money the policy can pay out when a claim occurs. Paying the annual premium for the insurance policy once a year rather than monthly, and working with an insurance broker who specialises in rental properties, are two other ways to help reduce the cost of landlord insurance.
The insurance policy taken out by the landlord covers liability that relates only to the rented premises. However, there are several things a landlord of a rental property can do to help reduce the cost of landlord's insurance. A landlord insurance policy costs approximately 25% more than an equivalent homeowner's insurance policy, according to a recent LendingTree article in ValuePenguin. Many landlord insurance policies exclude flood damage coverage and require the owner of a rental property to purchase additional coverage.
Depending on the insurer, this coverage may be included as a primary part of the policy or offered separately and called "rental loss insurance". Please contact The Webb Insurance Group with any additional questions or to obtain homeowners insurance, renters insurance, or any of your other insurance needs. If you live in an area that is prone to natural disasters, it is necessary to obtain special insurance coverage for earthquakes or floods. To avoid future legal disputes that may arise when your tenant's belongings are damaged, ask him or her to obtain renters insurance.
The insurance company would settle with the injured parties and pay the agreed costs, while the landlord would pay any excess.