Landlord insurance is a type of policy that covers rental property. The policy protects the property owner, the landlord, from financial loss related to his or her rental property. This type of policy usually supplements a homeowner policy by adding specific types of coverage. Rental properties that are generally eligible for landlord policies include multiple tenant properties, row homes, older and lower-value homes, vacation rental homes and other short-term rentals. Landlord policies usually do not cover a tenant’s personal property or interests.
There are different types of landlord coverage; however, the most basic policies compensate owners for damage to the property, and for liability claims from tenants and their guests. The different types of coverage may include liability coverage, lost income coverage, inflation protection and personal injury coverage.
Liability coverage protects the landlord from accidental damage claims that relate to the rental property. Lost income coverage, or fair rental value coverage, reimburses the landlord in the event that the property becomes uninhabitable due to a covered peril or loss. Inflation protection protects the property owner from the rising costs of repairs that are covered by the insurance writer. Personal injury coverage protects the landlord from injury due to libel, slander, invasion of property and wrongful entry or eviction claims.
Additional types of coverage include named peril coverage, agreed loss settlement for total loss, actual cash value for partial loss, and optional extended replacement loss. Named peril coverage protects owners from such perils as fire, explosion, lightning and any other uncontrollable event allowed by the policy. Agreed loss coverage protects owners if their property is completely destroyed by an insured loss, and actual cash value coverage protects owners from the costs of partial loss to their property.
The benefits of landlord insurance may change from one policy to the next; however, most policies benefit owners by protecting their investments from accidental damages and legal liabilities, insuring that they always receive their rent, and insuring that they get repairs done in a timely and affordable fashion.