If you rent out property that you own, whether it’s an apartment building or your former home, you need to make sure you carry the right insurance. In most cases, that is a landlord policy.
Landlord insurance is a type of coverage specifically for owners of property that is rented out to others. It typically covers the structure and the fixtures but not the personal property of the renters. Landlord coverage also typically offers personal liability coverage as well as coverage for loss of income.
Landlord coverage is for anyone who rents out property they own more than occasionally. In fact, in most places, landlord coverage is required for any property owner who does not live in the same building as his or her tenants. Even if you share your house with someone, if that person pays rent, you need a landlord policy. If you own a vacation home that you rent out less than a couple weeks a year, you can rely on your regular homeowners insurance; otherwise, you need a landlord policy.
Landlord coverage works much like homeowners insurance. It covers the structure as well as the fixtures of your rental property and it also offers liability coverage. What it does not cover is things that belong to your renter. If the rental property is damaged or destroyed, you will need to file a claim with your insurer, which will certify the claim and determine what its liability is. Depending on the policy, you may receive a lump sum or payment of actual expenses.
Most landlord policies have three elements: they cover the structure, provide reimbursement for loss of use and provide personal liability coverage. There are various riders and endorsements you can add on to your policy if you want to pay extra.
The main benefit to having landlord insurance is protection of your rental property, not only from a natural disaster, but also from intentional damage from a tenant. Additional benefits are reimbursement for loss of use and personal liability coverage.