Do you really need landlord insurance? In short, yes. Without landlord insurance, you put yourself at great risk as far as liability and repair costs are concerned.
Many landlords are put off by the idea of having to invest in yet another insurance policy. After all, your homeowner’s insurance should offer the cover you need, right? Wrong. Homeowner insurance will not cover you if you tenants living on your property. If you’re letting your property to tenants and you don’t have landlord insurance, you need to be aware of the dangers of not having this vital protection.
If a tenant injures themselves because of something dangerous on the property, you may be held liable for damages. If you don’t have landlord insurance, you will be paying those damages out of your own pocket. A standard policy will include this protection, and it can mean the difference between settling and going bankrupt.
You Will Be Liable for Contents Damage
If you’re like most landlords, you probably provide your tenants with a few essential items in the home, such as appliances or light fixtures. Many landlords offer fully furnished properties. While you may care about the upkeep of these items, your tenants may not share the same sentiment.
What would happen if your tenant destroyed a sofa or stained the carpeting in the home? You, as the landlord, would be responsible for replacing or repairing those items yourself. Even if your property is unfurnished, the cost of replacing or repairing these items can be devastating. Landlord insurance will cover any contents in the home that belong to you.
Your Insurance Company May Deny Your Claim
If your property suffers damage from a flood, fire or vandalism, your homeowner insurance may not cover the cost of repair or rebuilding.
When the insurance company first issues you the policy, it is with the understanding that you will be occupying the dwelling. Because you are letting the property to tenants and the insurance company was unaware of this, they may deny your claim. In fact, there’s a good chance that they will deny your claim. If your claim is denied, you will be responsible for paying for repairs or rebuilding.
What it ultimately comes down to is peace of mind, and that’s exactly what landlord insurance provides. Although it comes at an additional cost, you can rest assured that your property is protected against damages and your finances are protected against liability claims.