Anyone who rents out a home in Colorado Springs should be aware of what landlord protection insurance is. It’s a special type of insurance that can be purchased by someone who rents out a property that they own. Most of the time, this insurance has two separate levels of coverage: liability protection and property protection. Each of these types of coverage is designed to protect a landlord from suffering financial losses while operating the business.
Property Protection for Landlords
With landlord protection insurance, the property protection is what helps cover the actual physical property of the home that is being rented to someone else. This can include the dwelling itself but also all of the equipment kept on-site to maintain it and keep it in excellent condition. Some of the things that are typically covered include:
- The Property – Dwelling property insurance in Colorado Springs is what covers any repairs that need to be made to a rented apartment, condo, or home if it is a covered loss. Some of the most common examples include damage by hail, fire, lightning, or wind.
- Additional Structures – The policy will typically also cover repairs to any detached structures located at the rental property. This includes things like fences, detached garages, and sheds as long as the losses are covered under the policy.
- Equipment and Tools Use to Service the Rental – Items like snowblowers and lawnmowers that are left at the rental property are often also covered if they are damaged in one of the situations listed above. However, these items have to be used to maintain and service the rental. If someone has personal items like a radio or a bike at the rental, those things are not likely to be covered.
As with other types of insurance, all of the coverage options above are subject to limits and deductibles. All of these things will be spelled out in the paperwork for the landlord protection insurance policy. The deductible is the amount a person needs to pay under a covered loss before the insurance will start to take over. The limit is the maximum amount that the policy will pay after a loss occurs.
Every insurance policy is different so it’s important to look at the deductibles and limits when choosing one. In some cases, individuals can set their own limits and deductible amounts.
Liability Protection for Landlords
In addition to property protection, most dwelling property insurance in Colorado Springs also has liability protection. This is an entirely different type of coverage that is used if an owner needs to pay legal expenses or medical bills in a case where someone is injured at the rental property and the landlord is considered to be responsible.
As an example, if a tenant falls going down the stairs at the rental property, a court might determine that the landlord failed to maintain the railing or stairs. In this case, the landlord would be responsible for legal, medical, and other costs related to the fall that occurred.
Having top-notch landlord protection insurance assists with paying those expenses up to the limit of the policy. In many cases, there is no deductible to pay for liability claims.
What Isn’t Covered Through Landlord Insurance
Many of the expenses that someone incurs as a landlord will be covered with landlord protection insurance, but not all of them will. Most policies are going to have exclusions that will not be covered. As mentioned earlier, this can vary by provider. However, some landlord policies do not cover the items mentioned below:
- Equipment Breakdowns and Maintenance – If this exclusion is in place, a landlord will need to pay out-of-pocket for maintenance or equipment that breaks down. This might include something like a dishwasher or a furnace that no longer works. If the insurance won’t pay for this, the repairs or replacement are the responsibility of the landlord.
- Shared Property – Some tenants live in the same home as a landlord, either in a specific room or on a specific floor. Based on information from the National Association of Insurance Commissioners, these situations do not quality a landlord to take out landlord protection insurance in Colorado Springs. Instead, these policies are designed for properties that the owner does not occupy. Individuals can speak with their insurer to determine whether coverage can be added to a homeowners insurance policy for the part of the house that is being rented out.
- Tenant Belongings – Most of the time, landlord insurance will not cover the personal possessions of a tenant. Instead, the tenant will be required to purchase their own policy of renters’ insurance. Many landlords require a tenant to show proof of this coverage before being allowed to sign a rental contract. This insurance policy helps a tenant replace or repair personal belongings if they are damaged in certain situations, like theft or fire.
Additional Helpful Coverage
Based on many factors, such as the rental condition, the neighborhood, and the geographic area, some landlords will want to add extra optional coverage to their landlord protection insurance. Some options to consider include:
- Building Codes – Individuals replacing or repairing part of a rental after damage may be legally required to upgrade things like ventilation or wiring. The reason for that is because building codes can change after the property has been built. This coverage assists with these costs.
- Burglary – Typical landlord insurance may help repair a home after a burglary, but it won’t cover the items that were stolen. This optional coverage can help with the theft of items left on the property to maintain it, such as a lawnmower.
- Vandalism – Optional coverage is available for situations where vandalism damage needs to be repaired. This typically is not covered by traditional landlord protection insurance unless it is purchased as an addition.
Landlord protection insurance is essential for avoiding huge expenses when something goes wrong. It protects the landlord and the property that is being rented. Many insurance providers offer this type of coverage, so it’s important to research the options to get the coverage level needed at a reasonable price.