You’ve already picked out the best property and moved in the best tenants, so why do you need to worry about purchasing the best landlord insurance? Serving as a landlord can be incredibly rewarding in terms of gaining a high return on your investment, and you get the satisfaction of knowing you are providing quality housing services to your tenants. Landlords can face costly out-of-pocket repairs or lawsuits, however, making getting proper protections a must-do.
Fortunately, plenty of insurance policies exist to protect your property — and your pockets. As you navigate the dos and don’ts of being a landlord, Nomadic Real Estate is here to help you discern the best plan for your role. Here’s everything you need to know about protecting yourself and your property rental business.
What is Landlord Insurance?
Landlord insurance is a specialized policy available for anyone who rents out properties they own. Like all types of insurance, these policies exist to protect owners from potential damage or claims against their buildings. Although robust policies can be quite an investment, the initial payment quickly pays off if landlords are faced with extensive building repairs, lawsuits, or destruction of their rental properties.
These policies typically seek to protect holders in terms of both property and liability. Here’s what you need to know about both aspects:
This facet of your insurance policy primarily serves to protect the physical buildings you’re renting out. This can include housing, surrounding parking structures, and landscaping features like fences or gates. Maintenance equipment used on your property can also fall under this umbrella of policy, although some protections are subject to additional fees or premiums.
This portion of your plan protects you from costs associated with unforeseen accidents on your property. Liability insurance has you covered if you are found responsible for the medical costs of one of your tenants, for example, and can be used to absorb the cost of burglaries, vandalism, or arson. Natural disasters are another costly liability landlords face and can be protected under a policy, frequently with additional costs.
It’s important to remember that landlord insurance can be fairly inclusive, but it will not cover every maintenance need on your property. In-unit appliances that need repairs will have to rely on their own insurance packages or warranties.
How to Know if You Need Landlord Insurance
Many landlords who only rent out a single property prefer homeowner’s insurance over landlord policies. Here are a few facts to keep in mind:
- This can be helpful as it provides protection for personal property within the building, while landlord insurance does not.
- You may struggle to qualify for these policies if you do not typically live at the residence, however.
- Those who plan to rent their properties in the long term may find that landlord insurance is likely the way to go.
- Requiring renter’s insurance from your tenants is a great way to still have the protection of the personal property within the building.
- The higher premiums associated with landlord policies are frequently a turn-off for prospective purchasers.
- As a business-savvy landlord, it is reasonable that you would be wary of rip-offs.
Insurance prices are calculated based on the perceived risk that the insurance company is taking by protecting your business. A building with many tenants will face more damage and opportunities for claims, for example, because your renters may not treat your property with the same care with which they would treat their own.
Despite being a larger initial investment, you may see your purchase of landlord insurance paying off quicker than other policies. Selecting the right plan is not a decision to take lightly, though. Here are some of the best landlord insurance policies available, as well as some tips for matching your property with the perfect protection.
3 Best Landlord Insurance Policies
You’ll never run out of options when searching for a landlord insurance policy. This gives you a lot of freedom in your choices, but it can also make the process more tedious and confusing. It’s worth noting that if you have an existing insurance policy with one of these firms, you may be able to get a more affordable quote or package. Here are some good places to start.
State Farm‘s comprehensive landlord protection is a great starting package that includes the standard property and liability protections as well as some bonus features that may typically cost you extra. If, for example, your tenants have to evacuate the property for any reason, State Farm will cover the expense of their travel. This means you can still go above-and-beyond for your renters, without hurting your own bottom line. This policy also offers upgrades that will keep you protected in the increasingly digital age, and can help you heal from security lapses like data breaches or identity theft.
Owners of multi-unit properties should check out Farmers Landlord Insurance. It does not provide coverage for unconnected property structures such as sheds or garages, but the company has many features to increase the ease and efficiency of your workday. Its SmartMove software helps you to select strong tenants who are unlikely to incur many damages.
American Family Insurance
American Family Insurance provides protection through its Business Owners Policy, which includes a legal team to act as your defense for coverage claims. Larger operations and more robust coverage may want to consider its Commercial Liability Umbrella Policy. This upgraded package provides extra protection against major accidents, which all-too-often come with major price tags.
Remember, this is only scratching the surface of policies available to protect your enterprise. Fortunately, if you need any more guidance, we’re always here for you. At Nomadic Real Estate, we know that having peace of mind can be just as valuable as a piece of property. We exist to aid individuals and organizations with leasing, management, and sales with five dedicated teams and over a decade of experience. Contact an expert at Nomadic Real Estate today to get answers to any more landlord insurance policy questions you may have.