Do you need extra protection as a landlord? Absolutely. If you own a rental property, it is critical to understand the liabilities you face and the insurance protection you need. There are many factors to consider, depending on the type of property you own and the frequency and length of time it is rented. Here we will examine some basic information and answer commonly asked questions. Our goal is to help you access the protection you need for your unique situation.
For owners of properties that rent out primarily as short-term vacation rentals such as Airbnb, they are usually considered “business owners” by their insurance company. Therefore, they are not generally covered by “traditional” insurance and need to purchase a commercial policy. Airbnb’s website has some general information about their “host protection program,” “host guarantee” and their “host protection insurance.” Be aware that these programs most likely will not fully protect you. It is important that you discuss your situation in detail with a trusted local independent insurance specialist such as one of the experienced agents at the Noel Selewski Agency.
Renting out your primary residence
If you occasionally rent your investment property for short terms, you may be adequately protected by your existing insurance policy on the property. However, it is important to notify your insurance company and make sure you’re covered. In some cases, an additional insurance rider may be required.
Long term rentals
For rentals of six months or more, you will need a “rental dwelling policy.” It is specifically designed to protect you against potential losses related to renting out your property, and may cost approximately twenty-five percent more than a traditional insurance policy.
What will I be protected against as a landlord?
There are three general categories of losses you will be protected against with landlord insurance: property damage, liability, and loss of rental income.
Property damage coverage
Damages caused by fire, wind or rain, to an investment property or apartment’s structure are generally covered under property damage insurance. Certain major appliances, for example, refrigerators and stoves that are in the property for your tenant to use are usually covered also. It’s also important to discuss adding an optional rider for vandalism or other damages with your insurer.
As a landlord, you should require that your tenant purchase and maintain renter’s insurance to cover their personal property and ensure that your rental contract states that their property is not covered by you as the landlord. You can also have your renter name you as an additional insured person on their rental policy. The lease agreement should also include a non-negotiable hold-harmless or indemnity clause.
You are legally protected by your landlord protection insurance if your tenant is injured on your property. If you are sued by an accident victim, your insurance company will represent you, attempt to reach and pay a settlement on your behalf, less any deductible from your policy. One caveat to be aware of is that if a guest of your tenant is injured on the property, it is most likely that their renter’s insurance would be liable for that incident.
Loss of your rental income
In case your investment property is damaged by a covered event (like a fire,) your landlord insurance policy may cover your lost rental income if you’re unable to rent out your property while it is being repaired. Check with your insurance agent at the Noel Selewski Agency to see if “rent-loss” insurance is already included in your policy or if you need to have it added as an optional rider.
Other riders and coverages to explore
Your landlord protection insurance agent in Denver will also explain some options available to you. As a landlord, you should understand these additional types of coverages. Some examples to consider include: tenant move back expenses, building code coverage, non-occupied dwelling endorsement, and heating or air conditioning loss reimbursement.
Building code coverage
This coverage is for the cost of making required upgrades or renovations to your property if building codes have changed since it was built and you need to make repairs.
Non-Occupied Dwelling Endorsement
This option covers you in case any claims arise during a period when your property is vacant for more than 30 days.
Private Flood Insurance Less Than Government Policies
One of the most expensive and common problems a landlord can be faced with is flood damage. Unfortunately, it is typically excluded from most insurance policies. In some states and regions, it may be legally required based on the risk of flooding. Even if it’s not required, damage can still occur and you may still need flood insurance less than government policies.
There are several ways to protect your property from water damage caused by flooding, and it’s important to make sure your gutters are clean and working properly.
Did you know that forty-two states are considered at risk of earthquakes, according to the U.S. Geological Survey? You may not hear about them, but they do occur, and if your property is in an area with a history of earthquakes, this is coverage you may want to consider.
You don’t need to be a specialist; you just need to have one on your side
Your best “insurance” when it comes to getting the right landlord protection coverage for your property is finding a trusted agent in Denver. As you can see, there are many nuances and complexities involved in the insurance industry, and no landlord can possibly keep up with them all on their own.
The Noel Selewski agency is dedicated to “insuring your present to protect your future.” Our agency was founded in 1979 and as an independent insurance agency. We are able to work with you to select the coverage and carriers that are right for your unique needs as a landlord. We understand that every situation is unique and work for you to obtain the appropriate coverage at the best possible rate. We are the specialists you need by your side as a landlord.