Knowing what type of insurance you need is crucial to owning rental properties. That said, when investing in Richmond rental property, you will need landlord insurance. After all, accidents and damages can happen when you own and manage rental properties. Read along as we discuss why homeowner’s insurance isn’t enough and how you can find the best landlord insurance policy.
Contents of This Article:
- What is Landlord Insurance?
- Types of Insurance All Landlords Need
- What Does Landlord Insurance Cover?
- What Does Landlord Insurance Not Cover?
- Finding the Best Landlord Insurance Policies
- Should You Require Renters Insurance for Your Rentals?
- Investing in Richmond Rental Property Management
What is Landlord Insurance?
Landlord insurance is a type of property insurance that covers some of the risks of renting your property for long periods of time. Coverage will vary, but policies generally include protections from natural disasters, like fires and storm damage, liability coverage, and loss of rental income.
Homeowner’s insurance and landlord insurance have some similarities, but landlord insurance accounts for the additional risk of renting your property to tenants. So next, let’s go over some extra insurance coverage to think about while investing in Richmond rental property.
Additional Coverages to Consider
You may consider additional insurance coverage, depending on where your rental property is located, and the climate challenges you may face. Here are a few common coverages for landlords.
- Umbrella Policy- An umbrella policy will cover you from excess claims that exceed the limits of your landlord insurance policy.
- Flood Insurance- Most landlord insurance policies don’t cover flood damage. So, if you live in an area prone to flooding, it could be beneficial to get flood insurance.
- Earthquake Insurance- Similarly, if you’re in an earthquake-prone location, consider getting earthquake insurance to protect your rental property further.
- Emergency Coverage- If there’s an emergency at your rental property, like an electrical issue, this policy can cover the costs you incurred to fix it or the costs of hiring a contractor.
Types of Insurance All Landlords Need
If you’re investing in Richmond rental property, you will need landlord insurance. Some newer landlords assume homeowner’s insurance is enough for their rental property. However, that’s not the case.
Homeowner’s insurance covers owner-occupied properties. So, once you start renting your property to someone else, it’s no longer covered. That’s why landlords need more coverage with landlord insurance.
What Does Landlord Insurance Cover?
Most good, full-coverage landlord insurance policies have three primary protections–property damage, liability, and loss of rental income protection.
- Property Damage
- Liability Protection
- Loss of Rental Income
Property Damage
Most landlord insurance policies cover structural damage in the event of a natural disaster, fire, gas or electric malfunctions, earthquake, vandalism, or irresponsible tenants. It’s kind of like dwelling coverage under a homeowner’s insurance policy, except landlord insurance won’t cover the tenant’s property.
Protect our Investment with Professional Management
Liability Protection
Liability protection can help landlords pay for legal fees or medical bills related to an injury that happened on their property. For instance, if a tenant falls or hurts themselves due to icy sidewalks, old patio flooring, or other structural flaws, landlord insurance can help with the costs.
Loss of Rental Income
If a scenario causes your rental home to be damaged or inhabitable and you lose rental income, your policy could temporarily provide reimbursement to compensate for lost costs. For instance, if a natural disaster affects your property, your landlord insurance could cover lost rental earnings while you don’t have occupants.
What Does Landlord Insurance Not Cover?
While landlord insurance covers some of the most crucial aspects of owning a rental home, it’s important to note what it doesn’t.
- Tenant’s Personal Property
- Shared Property
- Maintenance and Repairs
Tenant’s Personal Property
Landlord insurance doesn’t cover any of the tenant’s personal property. Although homeowner’s insurance may protect your property inside your home, it doesn’t protect a tenant’s property in your rental home. As such, if your tenants want to protect their personal property while living in your rental home, they’ll have to get their own renter’s insurance policy.
Shared Property
If you live in the property you rent out, you may not qualify for landlord insurance. For instance, if you live upstairs and rent out your basement to a tenant, you could lose out on insurance benefits. Generally, to qualify for landlord insurance, you have to insure a non-owner-occupied property.
Maintenance and Repairs
You’re responsible for maintenance and repairs if you own rental properties. So, if something breaks down or your need to make repairs to a property, you’ll have to pay for it. If you need help managing and maintaining your rental property, contact your local rental property company in Richmond.
Finding the Best Landlord Insurance Policies
Landlord insurance is essential because it protects your properties.
As such, it’s best to look at all your options and choose a policy that provides the coverage you need. Here are some of the top landlord insurance companies to consider in 2022.
- State Farm
- Allstate
- Liberty Mutual
- Geico
State Farm
Whether you have an apartment building, single-family rental home, or a duplex, State Farm can protect your property. Their basic policies include general liability coverage, equipment breakdown protection, loss of income insurance, and more. Additionally, you can customize your policy to your needs with the help of an agent.
Allstate
Allstate is a great option to consider if you own several rental properties. They offer discounts for bundling a landlord policy with other coverages, such as auto or homeowner’s insurance. Furthermore, you can customize your coverage plan with add-ons and bundles.
Liberty Mutual
Liberty Mutual doesn’t come with as many add-ons as other policies, but you can still customize your coverage to fit your needs. They also offer discounts for bundling home and rental property insurance, avoiding a claim for five years, and getting a quote before your plan expires.
Geico
If you’re looking for a basic, affordable landlord insurance policy, consider going with Geico. They offer standard coverage, like lost rent, property damage, liability, and vandalism. Therefore, it’s best to contact an agent to get more information about policy costs and specifics.
Should You Require Renters Insurance for Your Rentals?
Although landlord insurance is a great way to protect your property, you may want to protect your rental further. Additionally, one common strategy is requiring renter’s insurance for your rental properties. Renter’s insurance provides tenants with some similar protections to a homeowner’s policy. However, it doesn’t protect the dwelling that they don’t own.
So, should you require renters insurance? Yes, it’s a good idea if you want to protect yourself further from property damage, liability claims, and emergency expenses. Generally, renters insurance covers tenant belongings, personal liability protections, and emergency living expenses for renters in the case of a covered disaster.
Investing in Richmond Rental Property Management
Finding an insurance policy is the first step. So, if you’re investing in Richmond rental property, you should also invest in property management services. After all, there are several aspects of running a rental business–and management is just one of them! Busy landlords may not have time to communicate with tenants and keep up with maintenance at all of their rental homes. But luckily, they don’t have to!
Looking for Professional Management? contact us today!
Bay Property Management Group offers comprehensive rental management services, so you can feel confident that your business operates smoothly 24/7. Our trusted property managers can help with tenant screening, maintenance concerns, inspections, rent collection, and more. Contact BMG today if you need rental management services in Baltimore, Philadelphia, Northern Virginia, and Washington, DC.
