Rental Property Insurance for Landlords

Who Needs Rental Property Insurance?

Do you live in the same home as your renter(s), or is it a separate residence? Do you only rent out your personal home for a few weeks per year, or is it a year round proposition? The answers to these questions determine whether you need separate rental property insurance quotes or whether your homeowner’s insurance policy will suffice.

Short-term Rental Insurance

If you only rent your personal property out a few weeks of the year, then your homeowner’s insurance policy will probably offer enough liability insurance.

What constitutes a “short term” rental? It depends on your insurance provider, but four weeks per year is a good rule of thumb. If you collect rent for more than four weeks per year at your personal property or not, you may be violating some clause of your homeowner’s insurance policy, and your provider could deny coverage should something happen.

Again, four weeks is simply a yardstick; to be certain, consult with Balsiger Insurance to find out whether your homeowner’s insurance will help protect short-term rentals, and for how long.

Sharing a Home

If you share a home with your tenant, a homeowner’s insurance policy should adequately cover you. Likewise, if you rent out a separate unit in your home, most home insurance providers will allow you to endorse your homeowner’s insurance with “Unit Rented to Others” coverage that handles that situation. As above, this might vary by provider, so be sure to check with your home insurance company.

Long-term, Separate Properties

A landlord will needs a more in-depth insurance policy compared to someone who simply shares their property with a short term renter. If you are a more serious landlord and rent out one or more separate rental properties for more than four weeks per year, you almost certainly need a landlord insurance policy. Whether the property is an investment or a source of income, it is important that you protect its value.

Types of Dwelling Policies

Most landlord insurance companies offer three levels of “dwelling policies.” These often have names such as the following:
• DP-1 (Dwelling Policy 1) – Most basic policy; covers fire, vandalism, etc.
• DP-2 – Broader coverage that protects against “named” perils, which can include fire and vandalism, as well as hail, windstorms, or even collision damage should a car strike your home
• DP-3 – Broadest policy; covers any peril unless specifically excluded
When choosing a dwelling policy level, consult with one of Balsiger Insurance's agents for advice as to what policy will make sense for you and your location.

Rental Property Insurance Coverage Types:

When choosing rental property insurance as a landlord, numerous policy types are available to protect you against a variety of losses. Some of the most common insurance coverages are described in the sections below.

Dwelling Coverage

This is the most important type of insurance coverage for rental properties. It protects your principal rental building and anything attached to it, such as a deck, solarium, or greenhouse.

Secondary Structure Coverage

This insures the other structures on the property that are detached from the residence, including garages, sheds, or barns,

Vandalism Coverage

This is an add-on to your insurance policy that helps cover the cost of repairs or replacements if vandals damage or destroy buildings, structures, or personal items used in or around the property. These items include lawnmowers, tree trimmers, and other tools and maintenance equipment.

Burglary Coverage

This is an add-on that covers the costs of repairs to your structures and replacement of stolen personal items used in or around the property.

Liability Coverage

This protects you against losses related to legal actions that arise out of an accident, injury, or other type of damage that occurs on your rental properties. For instance, if a tenant injures himself in a slip and fall accident due to torn carpet, poor lighting, or uneven flooring, liability coverage typically pays for any judgment against you, as well as any legal costs you incur.

Medical Coverage

This protects you against the cost of ambulance transportation, medical care, and follow-up treatments in the event that someone sustains injuries on your property. In the slip and fall accident mentioned in the previous section, liability coverage protects you against a lawsuit, while medical coverage reduces the likelihood of a lawsuit by covering the accident victim’s medical treatment costs in the first place.

Loss of Rental Income Coverage

If a covered loss occurs and your tenants must move out, you need not lose out on the rents they would have paid. Fair rental income coverage protects you from losing rental income you would have otherwise earned if your property becomes uninhabitable. Typically, payments last up to 12 months while you repair or rebuild your rental property.

Construction Coverage

You can protect yourself and your rental property even before it is ready for occupancy with “rental property under construction” coverage. This type of insurance is available whether you are remodeling an existing building or constructing a new one.

Ordinance or Law Coverage

While you are constructing, rebuilding, or remodeling a unit, ordinance or law coverage can defray any unexpected costs associated with compliance. For instance, if municipal or state ordinances require alterations to your budget, ordinance or law coverage will keep you from going out of pocket.

Other Policy Types:

The coverages listed above should protect you in almost every event. However, for the maximum protection of your business investment, you should also consider the following types of policies.

Flood Insurance

Flood insurance covers damage to your property by floods. Floods are the most common natural disaster in the United States, so they are not included in most homeowner policies. You must purchase separate flood insurance, or add it as a rider for your property.

Umbrella Insurance

Umbrella insurance is an extra liability protection that adds an additional level of protection against lawsuits due to damage or injury once the original coverage limit is reached. It also covers you against other actions that might otherwise fall through the cracks, such as libel, slander, and invasion of privacy. It is an essential coverage for people with a lot of assets that would otherwise be vulnerable to loss in a legal action.

Insure Yourself and Your Assets

No matter the type or the number of properties you own, you should protect yourself and your assets against loss with an appropriate amount of rental property insurance for landlords. Unless you share a residence with your tenants or only rent your property out for a few weeks a year, a homeowner’s insurance policy is probably inadequate.

Rental Property Insurance Conclusion

Choose an appropriate landlord insurance policy that will have you covered against burglary, vandalism, legal and medical expenses, and the cost to repair or rebuild the principal residence and any outbuildings. Construction coverage and ordinance or law coverage are useful during construction, repairs, and renovation, while flood and umbrella insurance protect you against perils that might otherwise fall through the cracks.

Contact Balsiger Insurance

Balsiger Insurance offers business insurance and rental property insurance for landlords in the following locations: Nevada, Montana, Arizona, Utah, Idaho, California, Oregon, Colorado, Wisconsin, North Dakota, Minnesota, Missouri, Pennsylvania, New Mexico, Ohio, Tennessee, Georgia, Illinois, North Carolina, Florida, Washington, and Texas.