How Does Rental Property Insurance Work?
What you need to protect your rentals depends on your situation. There are two common ways they work :
- You Occupy The Home You Are Renting :
You are living in the dwelling and there is a separate apartment in the dwelling. You'll need to advise the insurer to change the occupancy from "1 family" to "2 families". Most insurers will ask the occupants to get a renters insurance policy. This could be a condition to change the dwelling class to a "2 family home".
- You Lease Out A Home Separate From Your Residence :
If you lease out a property that you do not live in, you will need separate rental property insurance. What you need will depend on the type of rental and many other factors.
What Is Covered By Landlord Insurance?
It provides you with protection for your structure, contents, and liability. This includes your building structure on your land. It also includes legal costs if you face a lawsuit and other specific types.
Property
This provides you with protection for physical structures. It includes :
- The building structure : Protection for damage as a result of fire, wind, hail, lightning, and other perils.
- Other structures : Garage, deck, fence and other structures.
- Landlord contents : Personal contents onsite to maintain the land. This includes a lawnmower, gardening equipment, and snow blower.
Liability
This protects the owner from legal liability. It will cover the costs of legal fees and medical bills related to personal injury if the landlord has fault for the incident occurring.
Failure to maintain your rented property is one of the most common sources of liability claims against landlords.
