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Landlord Insurance: What It Is and Why You Need It

When you own rental properties, you’ll want to do everything you can to protect them. After all, an investment property is a large financial responsibility, so protecting it at all costs can help reduce emergency expenses in the long run. Whether you own vacation rentals, commercial buildings, or standard rental properties, it’s important to have landlord insurance. Today, we’ll go over the basics of landlord insurance, what it covers, and why all rental owners need it to protect their properties.

Contents of This Article: 

What Is Landlord Insurance?

Landlord insurance is a type of policy that protects property owners who rent to tenants. It helps cover potential risks and expenses associated with renting a property. That said, it helps long-term rental property owners, regardless of their property type. So, it could be a standard rental property, an office building, or a vacation rental.

Most insurance policies help cover things like property damage, liability if someone gets hurt on the premises, and lost rental income if the property becomes unlivable due to a covered event, like a fire or flood. 

Essentially, landlord insurance is like a safety net for rental owners and property management in Baltimore. It helps landlords and property managers deal with unexpected situations that may arise when renting out a property. Next, we’ll go over what it covers and what it doesn’t cover. 

What Does Landlord Insurance Cover?

While policies can vary, a good landlord insurance policy has three main protections, including the following. 


  • Property Damage- A typical policy covers damage to the home caused by fire, natural disasters, or criminal activity. It covers the physical structure of the rental property, including the building itself and any fixtures, like built-in appliances or light fixtures.
  • Liability Coverage- This provides protection in case a tenant or visitor is injured on the rental property and holds the landlord responsible. It can also cover legal fees if a lawsuit arises from such incidents.
  • Loss of Rental Income- If your rental property becomes uninhabitable due to a covered event, like a fire or flood, this coverage can help. It can help temporarily reimburse the lost rental income during the repair or rebuilding period.

What Landlord Insurance Doesn’t Cover

Unfortunately, your insurance policy may not cover everything. For instance, it won’t cover a tenant’s belongings. So, if your tenant’s furniture or personal belongings get damaged or lost in a fire, your insurance insurance won’t cover that. As such, most landlords encourage their tenants to get renters insurance to cover their belongings. 

Landlord insurance also doesn’t cover basic repairs. So, if the dishwasher or stove breaks down at some point, you’re generally responsible for fixing it. 

Who Needs Landlord Insurance?

It’s crucial to have insurance if you own properties and have tenants living in them. After all, landlord insurance can help protect your property and you as a landlord if anything happens throughout the lease term. 

So, whether you’re a real estate investor, vacation rental owner, commercial property owner, or any type of property owner, it’s important to look into landlord insurance. Additionally, property management companies that manage rentals on behalf of owners should ensure that they have proper insurance coverage to protect their interests and those of property owners. 

Why Do Investors Need Landlord Insurance?

Insurance for landlords is crucial for several reasons. After all, it can help protect your property, and it can help protect your business in some legal instances.


Here are some of the main reasons all landlords need insurance for their rental properties. 

  • Protect Your Investment
  • Legal Expenses
  • Coverage for Tenant-Related Risks
  • Protection Against Natural Disasters
  • Compliance With Lender Requirements
  • Peace of Mind

Protect Your Investment

Owning a rental property is a significant financial investment, so you’ll want to keep it safe and sound. Landlord insurance helps protect your rental by providing coverage for potential risks and property damages. 

Legal Expenses

Some insurance policies offer coverage for legal expenses related to evictions or other legal disputes with tenants. This can help landlords navigate legal challenges without incurring significant costs. 

Coverage for Tenant-Related Risks

Having the right insurance can protect your property against damages caused by tenants. It protects landlords against unforeseen circumstances, like intentional acts of vandalism or malicious property damage. 

Protection Against Natural Disasters

Depending on the rental property’s location, additional coverage for specific natural disasters like earthquakes or floods may be necessary. However, they’re not typically covered under a standard landlord insurance policy, so you may need a separate policy for that type of coverage.


Compliance With Lender Requirements

If you have a mortgage on the rental property, your lender may require you to get landlord insurance as a loan condition. This ensures that both the landlord’s and lender’s financial interests are protected in case of covered losses or damages to the property. 

Peace of Mind

Having insurance provides peace of mind. After all, having a good policy ensures you have financial protection in place to handle potential risks and liabilities associated with renting out your property. 

Protect Your Rental Business With BMG

When you own rental properties and have tenants living in them, landlord insurance is crucial. You’ll want to take every precaution you can to protect yourself, your properties, and your rental business. That said, another great way to protect your rental properties is by hiring comprehensive management services. 

Need More Advice? contact us today!

Our team of professionals at BMG offers several services, including rental marketing, tenant screening, rent collection, maintenance, and more. Additionally, we service areas such as Baltimore, Philadelphia, Northern Virginia, and Washington, DC. So, if you’re looking for help managing your rental properties, contact Bay Property Management Group today to learn more about how we can help your business succeed.