If you own your home, you probably have it insured against loss or damage. This type of insurance will provide you with the protection you need should something happen to your home. It will also provide protection should someone become injured while on your property. However, if you've decided to use your home for rental income, you're going to need more than your basic home insurance policy. You're going to need to add landlord insurance coverage. A landlord policy provides protection for your home when you're going to rent out your home on a full-time basis. Here are four ways that landlord insurance protects your investment.
Loss of Rent
If you depend on the income that comes from your rental, you can't afford to go several months without rent payments. Unfortunately, if your home is deemed uninhabitable due to damage, that's what will happen if you don't have the right coverage. That's where landlord coverage comes in handy. Adding landlord coverage to your home insurance policy will provide you with continued rent payments while your home is undergoing repairs or reconstruction.
If you have homeowners insurance, it will cover your loss of dwelling, if you're the one living there. However, if you have tenants, your regular policy might not cover the loss. However, with a landlord policy attached to your homeowner's policy, the cost of repairs or reconstruction will be covered. You'll still want to update your policy from time to time to make sure that the coverage includes fair market value replacement. That way, you have enough coverage to reconstruct your home to the current value.
If you've left items of your own on the property of your rental home, you need to include landlord insurance on your policy. The addition of landlord coverage with your homeowner's insurance will protect your personal property so that you can get it replaced. Without the addition of a landlord policy, the personal property might not be replaced should your rental property be lost.
If you have tenants living in your home, you may be held liable for any accidents or injuries they sustain while on the property. This is particularly true if the injuries are due to unsafe living conditions, such as if you fail to repair a broken staircase quickly enough. To protect yourself against liability, you need to have landlord coverage added to your homeowner's insurance policy. That way, your tenant's injuries will be covered, and you'll be protected should they decide to file a lawsuit against you.
Contact an insurance agency, such as Ideal Insurance Agency, to learn more.