Rental property insurance is a safety measure that helps alleviate the potential risk of losing treasured possessions or having to pay thousands in property damage. Whether you are renting a condo, a serviced apartment or a vacation home, rental property insurance helps safeguard against things that can go wrong when you rent a property.
What is Rental Property Insurance
Rental property insurance, also known as landlord’s insurance, covers residential or commercial properties. This type of policy is only an option if the owner doesn’t live on the property. There are a variety of other insurance policies that offer different levels of property protections. Typically, these policies work in connection with renter’s insurance.
Homeowners Insurance vs. Rental Property Insurance
Homeowners insurance covers all sorts of belongings like furniture, clothing, and computers while landlord’s insurance only covers appliances that provide services like a washing machine. Most homeowners have homeowner’s insurance which covers the homeowners property and possessions located on the property. But when you rent it out of your home, the homeowners insurance does not cover the tenant’s belongings.
The length of the lease also plays an important factor. If you are temporarily renting out your home, like for a big sports event, the homeowner’s insurance policy can be helpful. However, if you plan to permanently rent out an apartment in Financial District New York City then you need to consider buying a landlord’s insurance policy.
What Does Rental Property Insurance Cover?
Most of the features of rental property insurance are similar to homeowners insurance but there are some added benefits that homeowners insurance policies lack.
Similar to homeowner insurance, rental property insurance does cover any physical damage to the structure of the apartment. Bear in mind that insurance will only cover damage caused by fire, wind, lightning or other covered losses of your rental property.
- Landlord’s Personal Property
Rental property insurance does not include the tenant’s personal belongings, but it does cover items left onsite by the landlord. For example, the policy would cover damage to a lawnmower on the property that may have been damaged by fire.
Before buying an insurance policy, ask the agent if the homeowner’s property is included in the standard policy. Coverage for major appliances like refrigerators may be offered under a separate insurance policy.
- Liability Coverage
Liability coverage includes medical and legal costs in case someone is injured at your rental property. This means that rental property insurance will cover costs incurred if your tenant or a guest is injured while using your home as a rental.
- Rent Coverage
Rent coverage does not mean compensation if your tenant is not paying rent. Instead, it covers the rent lost when the apartment is uninhabitable due to a reason covered by your policy. For example, if a fire damages your rental property to the point that the apartment is not liveable, rent coverage will protect your income until your property is restored.
Generally, rent coverage is not included in a standard insurance policy. Discuss this type of coverage with an agent if you believe it would be beneficial for you.
Extra Landlord Coverage
Apart from the most common coverage, you may also consider other insurance coverage depending on your geographic area and the condition of the rental. This coverage may include:
- Theft or burglary; or
- Renovation or construction coverage, especially if you’re rehabbing an older building.
What is Usually not Included
We have discussed things covered by rental property insurance, some things are not included in the policy such as:
- Broken equipment — If any of the appliances in the house break down, you have to pay to get them repaired or replaced out of your pocket
- Shared Property — If you happen to live on the same property and only rent out a room or portion of your home, you wouldn’t qualify for landlord’s insurance.
- Tenant’s Belongings — Landlord’s insurance for a rental house does not cover the tenant’s belongings; the tenant would need to purchase renter’s insurance to protect their valuables.
How Costly is Insurance for a Rental Property
Typically, landlords should expect to spend 15% to 20% more annually on rental property insurance than they do on homeowner’s insurance.
Rental property insurance costs depend on a host of factors such as the term of the lease, the city and neighborhood where the rental is located. Insurance companies also consider whether the property is in a flood zone.
The Bottom Line
If you are going to rent your house to a tenant then nyrentownsell.com is the best option, you need to get landlord insurance. If you have financed your house through a mortgage, then getting landlord insurance is probably even required. Not having coverage leaves you vulnerable to significant liabilities that could wind up costing you thousands of dollars if any unfortunate incident happens.