When you become the owner of a rental property, you want to make sure that you are adequately protected from certain risks. If any type of event or accident befalls you and your property, you will want to minimize your financial losses. Fortunately, an effective form of protection for these cases exists: rental property insurance. So, what does rental property insurance cover?
Rental Property Insurance Coverage
Landlords often face several different types of risks and liabilities. There are two distinct categories of coverage with landlord insurance: liability and property protection. Having this protection in place can shield you from liability and costly damages. Various factors can also affect the cost of this policy. Here is a close analysis of these two types of coverage and of other types of incidents that rental property insurance covers.
Dwelling Coverage
This form of coverage protects you against physical loss (accidental or intentional) to your rental unit and all personal property found inside of it. Should your property’s physical structure become damaged as a result of a hazard that is covered by your insurance, your policy can help pay for certain reconstruction costs. If you have any questions about what proportion of the total repair costs your policy can pay (or any other similar queries), be sure to ask your insurer.
Landlords’ Personal Property Coverage
As a landlord, you are permitted to leave certain items, such as power tools, on your property. Should these items ever become damaged or stolen, they may potentially be covered by your personal property policy. One effective way to avoid filing personal property claims is to keep your rental unit clean and organized. Objects such as a bicycle or a Blu-ray player in the dwelling unit you decide to rent out are typically not covered under personal property policies.
Liability Coverage
This type of coverage is designed to assist you with payments for another individual’s medical expenses or legal bills following an injury (or injuries) this person sustains in your rental unit, for any reason (e.g. falling down stairs). You will only be obligated to pay for these expenses if you are found liable for the individual’s injuries. Liability claims generally don’t come with deductibles, so you don’t need to worry about this.
Loss Of Rent Coverage
Loss of rent coverage can help you by reimbursing you for any lost rent if this loss occurs as a result of a covered claim. This type of coverage may be especially beneficial in the event that your rental property becomes damaged or destroyed because of a storm, fire, or any other similar natural disaster that is covered by your insurance policy. Certain property insurance policies also provide coverage for claims filed as a result of vandalism and other forms of damage caused by tenants. Loss of rent coverage typically can’t repay you if your tenant refuses to pay rent for any reason.
What A Rental Property Policy Typically Does Not Cover
Just as it’s important to know exactly what rental property insurance protects you against, it is critical to understand what this type of policy generally does not cover. There are three things that such a policy will rarely cover:
Equipment & maintenance breakdowns
Should your kitchen appliances (dishwasher, oven, etc.) malfunction for any reason, you will likely need to pay for the corresponding repairs out-of-pocket.
Shared Property
If you reside on a property and rent out a room to a tenant, you usually won’t qualify for a personal insurance policy, per the National Association of Insurance Commissioners. Be sure to ask your insurer whether you can add coverage to your homeowners’ policy for the space you are renting.
Tenants’ Belongings
Personal property insurance also does not cover your tenants’ personal belongings (clothing, electronics, etc.). Tenants would need to acquire their own renters’ insurance in order to protect these possessions. Renters’ insurance policies often include personal property and liability coverage.
Reach Out To Professional Personal Insurance Brokers
Speak to the experienced professional personal insurance brokers at John M. Glover for more information on what a rental property insurance can cover. Although we are headquartered in Norwalk, Connecticut, we also serve clients in New York, New Jersey, Massachusetts and Hawaii. Since our founding in 1916, we have been dedicated to providing our clients with high-quality insurance solutions that meet their unique needs and concerns. We work closely with several renown and reliable insurance companies.
Our rental property insurance policies include dwelling coverage, landlords’ personal property coverage, liability coverage, and loss of rent coverage. This type of insurance is especially important if you rent out a vacation home or other investment property. You never know what types of risks you may face when you decide to become a landlord. Call JMG Insurance Agency today at 1-(844) 304-7332 or contact us online to learn more about our insurance products.