Property Insurance Basics for the New Landlord

As a landlord, you want to make sure your property is protected, but you have no real control over what happens in your home or apartment while it is rented out by tenants. Because of these changes, a regular homeowners insurance policy will not cover any damages done by your tenants and you must invest in landlord insurance. This will cover the property, liability and some personal property of the landlord, but not of the tenant. Tenants must purchase renters insurance to be fully covered.

There are several features that are involved in landlord insurance, and knowing them will help you feel more secure in renting your property out.

Feature #1: Liability Coverage

As you rent out your property, you are no longer covered by personal liability but you are under business exposure. Though insurance will not cover every law suit that may be brought against you, they will often help with your legal fees. Make sure you get a detailed description of what your insurance will cover.

If you can afford it, get $1 million in coverage. This is generally not much more than other liability insurance and will make sure that you are fully covered in case of a law suit.

Feature #2: Exposure Coverage

Exposure coverage will help cover costs maintaining and repairing areas around your property. It is important to keep up with routine inspections and renovations before, during and after renting it out. Clean and repair your sidewalks, stairs and railings. Trim back trees that could cause a hazard, make sure your fence is sturdy and make sure there is no pools of water where I child could fall in. Make sure the appliances are working and isn't a threat to safety. Look around your property and fix anything that needs fixing. Doing this before and after each renter will save you time and energy during the rented period.

Feature #3: Disaster Coverage

Most policies for landlords will cover damage caused by hail, wind, fire, sleet, snow, ice and lightning. The one thing that most policies will not cover is flood damage. If your property has flood risk, make sure to get an additional flood policy. In most cases, the insurance will pay for all repairs needed, but it is good to know specifically what you are covered for in case of a natural disaster.

Feature #4: Loss of Rent Coverage

If a natural disaster or something occurs that requires you to make repairs without tenants, your insurance will make sure you are covered for your loss of rent until everything is back in order.

Feature #5: Landlord Property Coverage

Though your insurance will not cover any of the renter's personal property, it may cover your appliances and other machinery used by your tenants. In some cases, it will even cover you furniture.  It is important to take into account what the insurance will cover and plan ahead accordingly.

There are several other "available" options as well that you can pick and choose from. When making your decision look for any possible problems that may occur and make sure you are covered for it.