Everything you need to know about landlord insurance

If you’ve recently purchased a rental property, you have a lot to think about right now. From finding the right tenants to preparing your rental for move-in day, there’s no doubt you’ll be busy — and that’s why we want to help you check one to-do off your list: protecting your investment with the right insurance policy. We’re here to answer your questions as you’re considering insurance options for your rental property.

Do I have to buy landlord insurance?

If you’re wondering whether you need to buy landlord insurance or if you can stick with a regular home insurance policy, the answer is pretty simple: most standard home insurance policies don’t cover rental activities, so you’ll probably need landlord insurance. That said, there are some cases where you may be able to stick with a regular home insurance policy — if you’re only renting out a room or suite in your home, for example. But if you’re renting out a separate property or a unit in a building where you don’t currently live, you’ll need landlord insurance.

What’s the difference between landlord insurance and regular homeowner’s insurance?

There are a couple of key differences between landlord insurance and standard home insurance:

1. Landlord insurance usually includes coverage for loss of rental income in case your tenants have to move out following an insured event (like a fire, for example).
2. With landlord insurance, coverage for personal belongings only applies to items you own, such as major appliances and furniture you’re including with the unit. This means damage to your tenants’ belongings doesn’t hit your insurance policy — they’ll need to purchase their own tenant insurance if they want to protect their belongings.

Landlord insurance usually includes coverage for loss of rental income in case your tenants have to move out following an insured event (like a fire, for example).

How much third-party liability coverage should I get for my rental property?

You’ll most likely want to have more third-party liability coverage for your rental property than you would for your own home. You can’t control your tenants or their guests, and if something were to go wrong on your property, you could face a pretty hefty lawsuit. You should also consider a higher third-party liability limit if there’s anything on your rental property that could increase the chances of someone getting hurt (e.g., a swimming pool). Bumping your liability limit to the next level may cost less than you think, so it’s worth pricing out a couple of different options.

You should consider a higher third-party liability limit if there’s anything on your rental property that could increase the chances of someone getting hurt (like a swimming pool, for example).

Remember, it’s important to let your licensed insurance broker know whenever your situation changes, whether you decide to rent out a room in your own home or you’ve purchased a new rental property. If you’re shopping around for landlord insurance and would like the help of a broker, you can find one here. A broker can go over the specifics of the coverage options available to you and help you choose the best policy to suit your needs.

Want more tips for first-time residential landlords? We can help.

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