Insurance is a vital component of Harford County rental home management. It is widely available and designed to help protect landlords from financial losses due to a covered peril. That said, there are so many companies and offers out there, how do you know what coverage is best? Landlord insurance is for those who rent out a home as opposed to it being their primary residence. Read on to learn more about different types of policies available for landlords.
Types of Insurance Coverage for Landlords
- Dwelling: In the event, damage occurs through a covered peril such as fire, wind, or lightning; this coverage assists in paying for repairs to the structure. Keep in mind flood coverage is not included in a standard policy.
- Other Structures: If you have any sheds, outbuildings, fencing, or detached garage that may become damaged, this coverage is a lifesaver.
- Personal Property: If renting your home, you likely do not have many personal belongings there, if any. But what if you left a lawnmower for tenant use in maintaining your property? Coverage includes this type of item under a personal property policy.
- Liability: This is a must! Liability coverage helps you pay for medical costs if an injury occurs on your property due to your negligence. For example, if you fail to maintain the broken front steps and someone falls, you may be found responsible for the tenant’s medical costs.
- Appliance and Systems: Some insurance companies provide the option of adding appliance and major system coverage in addition to any home warranty you may have. This would protect items such as kitchen appliances, HVAC systems, furnace, and your washer and dryer.
- Lost Rent or Business Interruption: Should your property become uninhabitable due to a covered loss, this coverage would compensate you for lost rent. So, you would still be able to pay for the mortgage even if a tenant was not residing in the home while repairs take place.
- Flood Coverage: Flood insurance is not part of a standard policy. Instead, it goes through the NFIP or National Flood Insurance Program. This is a government program that would be a separate policy from your landlord coverage.
Why Do I Need Landlord Insurance for my Harford County Rental
If you mortgaged your home, you are required to have homeowners’ insurance. Read carefully, though, as standard homeowners’ insurance may not cover you if you are renting out the house. While landlord insurance does cost more, it is designed explicitly for non-owner occupied housing. Also, you may be eligible for investor tax deductions of the insurance premiums, which can help offset costs.
Should I Require Tenants to Have Renters Insurance?
Yes! Landlord policies cover the dwelling and property, depending on the specific policy. However, a landlord policy does not cover tenant belongings or property. Requiring tenants to purchase coverage as a stipulation of their lease has quickly become the industry norm over the past several years. Just like landlord insurance, there are types of renters insurance.
- Personal Property: This covers the cost to replace or repair a tenant’s personal belongings. Examples include clothing, furniture, and possibly electronics, depending on the policy terms.
- Liability Coverage: This covers the accidental damage of someone else’s property. Just as in landlord liability, tenant liability may include medical bills for guests injured on the premises. Lots of damage when the tenant moves out? You can try to seek compensation through their liability policy.
- Additional Living Expense: Should the rental be deemed uninhabitable, this coverage assists with temporary living expenses such as hotels.
There are many legal and financial benefits to thoughtfully choosing a landlord insurance policy as part of your Harford County rental home management plan. All companies and policies will have their specific language, so consult a knowledgeable insurance agent to guide you through your options. Need help with rental home management in Abingdon or Harford County? Contact Bay Property Management Group Harford County for a free no-obligation rental analysis today!