Landlord insurance offers an excellent way for landlords to protect themselves if an event should prevent them from using their property to generate income.
In the event of a legal dispute between a landlord and a tenant, landlord insurance that includes coverage for legal expenses is a must and will provide compensation for any legal fees related to the proceedings. If property is damaged and the premises are uninhabitable, landlord insurance can provide the necessary funds to repair the property and can also compensate landlords for any lost rent as a result of the damage and rebuilding process. Coverage may extend to the interior of the property, or may be limited to the exterior of the property. Be sure to ask your insurance representative precisely what is and is not covered by your specific policy.
Many coverage options are available for landlords, so be careful to consider all of the various options before selecting an insurance policy. Comprehensive insurance policies will provide coverage for any situation except for those which are specifically excluded. Peril policies on the other hand typically cover select types of damage and provide a list of the specific types of losses that are covered by the policy. All potential policyholders should consider property damage, libel, slander, and discrimination as important concerns to consider when selecting a plan.
Landlord insurance will typically settle property losses through two methods: cash value settlements and replacement value settlements. Cash value settlements generally carry lower premiums because compensation only occurs after depreciation is subtracted from the property’s current value. Replacement value settlements cover the cost of replacing damaged property without taking depreciation into account. Property must be replaced or the settlement will be the actual cash value.
Increasing the deductible is another way the policy holder can get a discount on premiums. Landlord insurance covers the property and the landlord’s rights. If tenants wish to be covered, they should invest in renters’ insurance policies to protect them from any damage to their personal possessions or property belonging to a visitor. Renters’ insurance also has several coverage options, and if the right coverage plan is selected it can also cover legal expenses.