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Property Management
What Is Rental Property Insurance?
Learn how rental property insurance protects property owners.
Article Contributed by RentSpree (www.RentSpree.com)
Disclaimer: This article is not legal advice. Any legal information is not the same as legal advice, where an attorney applies the law to your specific circumstances, so Iyou should consult an attorney if you would like advice on your interpretation of this information or its accuracy. You may not rely on this article as legal advice, nor
as an endorsement of any particular legal understanding.
n many cases, rental property owners may believe property is subsequently destroyed, personal that their homeowners insurance policy is sufficient property coverage would pay for replacement or to protect their property. However, rental property damages.
insurance, or landlord insurance, offers a more
comprehensive option -- one that is specially designed to protect property owners and their financial interests.
• Liability Coverage. If a tenant or his or her guest falls or is injured while on the premises, they may sue the property owner for medical costs or damages. Liability coverage offers protection over
How does rental property insurance differ from and above that provided by the tenant’s renters
homeowner’s insurance? How is it different from renters’ insurance? Is rental property insurance required and what are the pros and cons involved? In this article, we answer your most pressing questions so that you can better inform and educate the owner of the property you manage and find the right coverage if needed.
What is Rental Property Insurance or Landlord Insurance? Rental property insurance is a type of insurance coverage that applies to non-owner-occupied properties and addresses some of the specific challenges associated with rental property ownership. Rental property insurance may include some or all of the following elements:
• Dwelling Coverage. Just like homeowners’ insurance, rental property insurance covers damage or destruction of the dwelling itself. Depending on the type of coverage, dwelling coverage may be limited to specific types of perils and may differentiate between actual cash value and replacement value coverage. Be sure to check the policy type in order to determine what is covered and what is not.
• Personal Property Coverage. Rental property insurance does not cover the personal property of the tenant; that’s what renters’ insurance is for. However, it does cover the personal property of the property owner. For instance, appliances, lawn implements, and other items which may be provided with the property rental are considered the personal property of the owner. If that personal
insurance.
• Loss of Rent Coverage. In the event that damage makes the rental property uninhabitable, loss of rental income coverage can help cover financial losses while it is being repaired.
• Specialty Insurance Coverage. Many insurance policies do not cover damage caused by floods or earthquakes. If the rental property is in a floodplain or earthquake zone, it will usually be necessary to purchase specialty insurance policies to cover these specific types of natural events.
• Umbrella Policy Coverage. For property owners with a large amount of personal wealth, an umbrella policy adds additional coverage to shelter their liability for amounts over and above the policy limits. If they have not already done so, the property owner should explore ownership through an LLC to further protect them from personal liability.
How Does Rental Property Insurance Differ From Renters’ Insurance?
Rental property insurance is distinctly different from renters’ insurance. Whereas renters’ insurance is designed to protect the tenant and his or her property, rental property insurance is designed to offer an extra level of protection for property owners -- one that is significantly more comprehensive than traditional homeowners’ insurance.
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