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Just for Property Managers

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Many new (and established!) landlords don’t consider the need for a new insurance policy when they decide to rent out their house. But without proper coverage, you could leave yourself open to costly damages. Here are some tips on how to protect yourself and your property as a landlord.

New status, new policy
Once you have tenants in your house and live off-site, you now have what’s known as a non-owner occupied dwelling. Along with this new designation come some new risks and the need for a different type of insurance coverage.

As a homeowner who lived in the house, your policy covered you for damages to the structure, damages to the property and liability protection in the case someone on your property sustained personal injury and accused you of neglect. When your home is occupied by renters, you’ll need some additional protection in all of these categories and a few new ones.

Landlord insurance
A landlord policy protects the structure of your property, but also takes into consideration a higher likelihood of storm damage, fire, vandalism and burglary, since the home may stand vacant between tenancies.

The policy should also pay you for “loss of use” should your property become uninhabitable due to any of the above circumstances, thus becoming unrentable. You should also be covered in case a tenant loses their housing as a result and wants to sue you.

Liability
As a landlord, you’ll have no knowledge or control of what might happen on the property or to whom. In addition to the tenants or their guests slipping and falling, there is also risk from uninsured repairmen who might get injured.

Be sure you carry adequate liability insurance and consider an umbrella policy, which offers more coverage when your basic liability limits have been reached. This coverage can be especially important in the case of law suits, which can accrue significant attorney and court costs.

Personal property
A landlord policy will cover any personal property you have at your rental, but it will not cover your tenants’ property. It is a good idea to urge your renters to get a renters policy, which will cover loss of their property due to theft or natural disaster.

Get the details
Not all landlord policies are created equal. For example, let’s say your property has a woodstove, which you’re happy to make available to the tenant as long as she has renters insurance. Don’t assume that your landlord’s policy covers fire damage as a result of the renter’s negligent use of said stove! Each landlord policy has specific coverage and exemptions, so be sure to read the fine print and ask your carrier plenty of questions.

The lease is signed, you’ve handed over the keys and the new tenants are moving in. They seem nice, and the credit check looked good. Don’t sweat it. As long as you have a landlord policy and plenty of coverage, you and your rental property should be in good hands.

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