5 Biggest Benefits of Landlord’s Insurance

Concept of landlord insurance with small home sitting on landlord contracts

What if your biggest investment was in danger and you didn’t even know it? 

That’s the case for any landlords who don’t have the right insurance policy. Renting out a property may seem like it’s just an easy way to boost your passive income. But if you don’t properly protect the property – and yourself -, then you could lose that source of income. And worse, end up in the hole. 

Everyone who rents properties out needs landlord’s insurance, but many such owners are on the fence about getting it. Need help making your own decision? Keep reading to discover the biggest benefits of this special coverage! 

What Is Landlord’s Insurance? 

As the name implies, landlord’s insurance offers special coverage for property owners. Specifically, it is designed to protect homes from damage that any tenets might cause. 

The reason this is so important is that your homeowners policy is typically not sufficient for claims regarding rental properties. If you don’t have the coverage you need when you need it, then your source of passive income could instead become a major source of debt. 

Now that you know more about what this plan insures, let’s take a closer look at the benefits it has to offer you. 

Benefits of Getting Landlord Insurance 

1. Improve Your Chances of Claims Getting Accepted 

While nobody ever hopes to have to file a claim regarding their home, you will eventually have to do so if renters cause enough damage. If this happens and you rely solely on your homeowners coverage, you run a significant risk of your claim being denied. 

That’s because carriers have very strict rules regarding what a standard homeowners plan will and will not cover. In most cases, scenarios where tenants cause major damage to properties are not covered, which means you’ll need to get landlord insurance to ensure that once you file a claim, it will be accepted without a problem. 

2. Legal Help When You Need It Most 

What’s the one word that all property owners dread? “Lawsuit.” If a tenant ends up suing you (and many are just looking for an excuse to do so), the court costs will add up really quickly. In fact, even if you end up winning in court, the costs of defending yourself may be high enough that it permanently puts an end to your passive income. 

With special plans for landlords, though, you get the legal help when you need it the most. You’ll get assistance with legal fees so that you don’t have to pay a small fortune out of pocket. And you’ll even have protection against lawsuits that allege you violated the Fair Housing Act, the Americans With Disabilities Act, or any other state or federal regulation that may result in an expensive lawsuit. 

Landlord looking over landlord insurance contract with pen in hand

3. Extra Liability Coverage 

The next benefit of landlord insurance is a direct extension of the previous benefit. With your existing homeowners policy, you already have liability coverage, and you may think this is enough to protect you if things go to court. But when you rent out a home, existing liability plans are usually insufficient. 

Think about it this way: Your current homeowners liability is meant to cover scenarios where, say, a single visitor to your home slips and falls and then holds you legally accountable. But when you rent your home out, you have no control over how many people they bring in or what they do. You could be just one Fourth of July celebration or another raucous event away from multiple people getting injured, and if you don’t have added insurance, you may end up losing the house altogether instead of enjoying record profits

4. Protect Against Tenants Damaging the Property 

We’ve touched a few times on the possibility of tenants damaging your house. Why is this such a major concern? The short answer is that your current homeowners policy will not protect you against damage caused by people to whom you rent the home, nor will any umbrella policies

The good news is that most renters don’t set out to cause deliberate damage to the house they are renting. The bad news is that tenants cause accidental damage all the time, including everything from water leaks to electrical issues and even major HVAC issues. Each one of these incidents can lower your home’s value, which is why you need to file relevant claims ASAP. However, those claims will go nowhere if you are relying solely on homeowners coverage. 

By getting landlord insurance, you are doing more than protecting your investment. You are also giving yourself peace of mind because you know that whatever tenants break, you’ll be able to fix or replace. For added peace of mind, consider requiring residents to take out renters insurance

5. Protection Against the Property Becoming Uninhabitable 

Beyond getting sued into oblivion, the biggest concern most property owners have is that renters manage to burn the house down or otherwise make it where nobody can live there. That residence is your source of passive income, but that income will dry up immediately if it becomes uninhabitable! 

If you rely entirely on existing homeowners coverage, you should know that such plans normally don’t replace homes that have become completely uninhabitable. If you get a landlord policy, though, you’ll be able to replace the house as good as new. By protecting each home you own with the right plan, you never have to worry about your income going up in smoke due to factors such as a malfunctioning smoke detector. 

Get the Best Landlord’s Insurance Today! 

Here at InsureOne, we are experts when it comes to protecting property. We are always ready for you to get a quote online, give us a quick call at 800-836-2240. or feel free to come into one of our nearby offices at your earliest convenience!