What is Landlord Insurance?
Posted by David Ross on Sat, Mar 16, 2024
Why? Insurance is all about risk, and renting out your property to someone else increases risk. Therefore, if something happens to a rental property or someone is injured on the property, homeowner's insurance will not cover you. Furthermore, if you have a mortgage on the property, your lender will most likely require Landlord Insurance if you are not a property resident. Landlord Insurance is a unique type of homeowners' insurance that protects your rental property, whether it's a house, condo, guest house, apartment building, commercial building, etc. It covers many of the risks that homeowner's insurance covers and more. A good Landlord Insurance policy typically protects against three main risks: You may hear the terms DP-1, DP-2, or DP-3. DP stands for dwelling property. DP-1 provides the most basic level of coverage, and DP-3 provides the most comprehensive coverage. The cost of Landlord Insurance can vary, based on the following factors: Typically, Landlord Insurance costs about 25% more than a standard homeowner's insurance policy. Although it is not required by law, most lenders will require Landlord Insurance, and it makes good business sense. To choose the right coverage for your property, you need to consider the potential risks, how much cash reserve you have, etc. For example, if the property is near a river, you may want to consider flood insurance, or if you have little or no cash reserve and rely on the rental income to pay the mortgage, you may want to consider guaranteed income insurance. Here are a few of the riders you may want to consider adding to your insurance policy: The experienced agents at American Insuring Group are always happy to address any questions you may have. Here are some questions to ask: Contact one of the independent agents at American Insuring Company who specializes in Landlord Insurance. They understand your needs, can make recommendations, answer any questions, and ensure you have the right insurance (no gaps, but also not paying for coverage you don't need). Plus, as independent agents, they will compare the cost of your coverage among many insurance companies to ensure you receive the lowest insurance premiums for the protection you need. Call us today at(800) 947-1270or(610) 775-3848, orconnect with us online.Many new real estate investors assume homeowners' insurance will cover any damage or liability associated with their rental property. However, if you are not the resident of a property and instead rent it out to someone else – whether it's for a week or several years – you need Landlord Insurance, not Homeowner's Insurance, to protect yourself and your assets.
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