If you have invested in a rental property, you need to take the next step and purchase landlord insurance to protect your investment. Your homeowners' insurance only protects your residential properties and not your investment properties. Here are three major things with which landlord insurance can help you.
A tenant who thinks you have wronged them can sue you for damages, and if that happens, your landlord insurance will come to your rescue. Tenant claims can take various forms; here are three of the most common.
Wrongful eviction occurs if you evict a tenant without a valid legal basis. For example, if you evict a tenant after the requisite notice duration but it turns out that the tenant never got the notice, the tenant may sue you for wrongful eviction.
A tenant may sue you for property damage if the tenant is convinced that you were responsible for keeping their property safe and you failed in this duty. For example, a tenant may sue you if poor electrical wiring triggers an electrical fire that destroys the tenant's belongings.
Tenants can also sue you for personal injuries that you failed to prevent even though you owed the tenant that duty. For example, a tenant may sue you if they suffer from carbon monoxide poisoning because your carbon monoxide detectors weren't working.
Claims from Third Parties
The potential lawsuits with which landlords insurance can help you are not limited to tenant claims. Visitors on your property, such as your workers or guests of your tenants, may sue you if they get injured on the property. For example, if a visitor slips and falls in a slippery hallway, they may hold you liable for the injuries.
Losses Related To Your Property
Lastly, landlord insurance also compensates you when you suffer losses related to your properties. For example, if a storm damages the roof or a fire burns part of your rental property, you can file a landlord insurance claim to help you repair the damages. The insurance will also help you if thieves break into your property and steal your valuables, such as appliances.
A single disaster can cause you hundreds of thousands or even millions of dollars of losses if you don't have landlord insurance. Before you rent out a property, talk to an insurance agent to help you buy the right coverage because you don't know when a disaster might strike.
For more information, contact a company like Ahlquist Insurance.