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Getting the right landlord insurance for your rental

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If you are planning to rent out your home, one of the top landlord tips you should consider is to get landlord insurance. It will protect your rental property from a variety of issues, from tenant-related damages to force majeure. Learn more about landlord insurance below.

What is landlord insurance?

Landlord insurance offers protection to residential real estate that is not occupied by the owner. There are three tiers: DP1, DP2, and DP3. Of the three, DP3 policies feature the most comprehensive coverage.

Apart from protecting landlord-owned contents, DP3 landlord insurance may cover the following:

  • Property damage
  • Personal property protection
  • Liability
  • Loss of rental income
  • Acts of nature (hurricanes, flooding, earthquakes, etc.)

Property damage, liability, and loss of rental income are the staples of a basic landlord insurance. With these policies, damage to the physical structure of your rental property, liability claims (legal and/or medical), and lost rental income are covered.

Do you need landlord insurance?

Landlord insurance is for rental properties. If you are only planning to rent out a room or a part of your home while you reside in the property, your homeowners’ insurance should suffice.

Can you create a custom landlord insurance policy?

Yes, you can. But this depends on the where you are going to get landlord insurance. These insurance companies offer customizable policies for different kinds of rental properties, from condos and single-family homes to multi-family residences.

There are plenty of riders you can add to your landlord insurance. It could be based on your rental property’s location, real estate type, and condition, among other factors. Your options include:

  • Heating & air conditioning reimbursement
  • Equipment breakdown
  • Personal injury
  • Dwelling fire
  • Rent guarantee
  • Additional construction

It is best to shop around for landlord insurance. Ask about the custom options insurance companies offer to find the best policy that meets your real estate needs.

How much does landlord insurance cost?

Landlord insurance typically costs around 15% more than homeowners insurance. If a homeowners policy costs an average of $700 to $1000 annually, you can expect the premium for a landlord policy to be in the $800 to $1200 range.

That said, the actual pricing will depend on several factors, including the condition of your property, its location, and riders you want to add to the coverage.

What is not covered by landlord insurance?

Landlord insurance does not cover your and your tenant’s personal belongings, and maintenance or repairs of appliances on the property. To protect your belongings within the rental property, include it in the lease agreement as part of the tenant’s responsibilities.

Meanwhile, tenant should get their own renters’ insurance to make sure that their personal belongings are covered. Although it is not required by law, you should advise them to do so or make it mandatory as part of your contract.

If you are looking to turn your home in Ogden, Utah into a rental, our team can help you learn more about landlord insurance and property management. Contact Destination Properties at 801.745.2009 or email info(at)destinationproperties(dotted)com to learn more.