Landlord Insurance Review
Home is where the heart is! So, you should protect your home and its contents by taking a Landlord Insurance policy. If you are a Landlord, then you likely want to have certain protections in place. Even with the most well-intentioned tenant’s, things may sometimes go wrong and cost a significant sum to put right. In the event of issues as diverse as accidental flooding and failed rent payments, the right cover can provide important peace of mind. Hence by taking a best Landlord’s Insurance policy, the homeowners can sit back and relax as they will help to safeguard your financial future. Landlords insurance provides coverage for property owners renting out one or more residential homes, apartments, or condos. So, as a landlord, you need to protect your property from financial loss that may result from damages such as natural disasters, fire, break-in, severe weather, and much more.
Landlord insurance has two modes of settling claims namely replacement value and actual cash value regarding the loss of property. As per the actual value cash settlement method, the premium to be paid is lesser because the amount received as compensation has the depreciation reduced from the actual property value. Under replacement value settlement, compensation will cover the necessary costs of replacing the destroyed property without considering any deprecation.
If the landlord’s property has been damaged after habitation, then this Landlord Insurance will provide coverage for repairing costs to fix the damages. The house owner will also be compensated if he/ she loses out financially in collecting any rent during the stage of rebuilding. It’s also important that you have buildings and contents insurance cover so that, in the event of a flood, storm, or any accident, you won’t be left out of pocket. The policy wordings will state you clearly the coverage provided and the policy exclusions. So, one must read those thoroughly before buying one to be aware of what the policy provides.
What is Covered by Landlord Insurance ?
A Landlord’s insurance policy cover you against property damage and also from liability claims. Since there are many insurance companies available in India, each offers different coverages. Some cover your residential properties whereas some cover commercial properties and some a mixed portfolio. But most of them offer you coverage for the following.
- Damage to your property: The insurer covers the damage to the structure of your building and personal properties in case of fire, theft, storm, and tenant damage. If the total loss has occurred to the building, then this landlord insurance policy will cover the replacement costs for the whole property.
- Coverage against Loss of Income: The Landlord’s insurance will help you compensate the loss of income in case your rental property becomes uninhabitable due to any loss like storm or fire. The rental reimbursement will prevent you from losing the rental income.
- Liability Insurance: The liability portion of a land lord insurance policy will help you in paying the medical bills of another person or your legal expenses if someone else is injured on your rental property and you are found responsible. For example, your tenant falls down from the stairs at your rental property and if the court determines that you have failed to maintain the stairs or railing, then you are only responsible for your tenant’s medical, legal and other expenses. So, in that case, your landlord liability protection coverage may help you to pay for those expenses but up to your policy’s limits.
- Additional Coverage: The Insured can also opt for additional coverage such as rent guarantee insurance, natural disaster insurance, landlord contents insurance, and employer liability insurance which can be customized as per their requirements.
Types of Landlord Insurance
Before taking a Landlord Insurance, it is always important to know what was covered by each type of insurance, so here are a few things to bear in mind. Make sure you check your policy thoroughly to understand what it includes. Check out the various types of Land Lord Insurance here.
Landlord’s Content Insurance
The Landlord Contents insurance covers your personal possessions if they are damaged or stolen. This type of insurance protects your Sofas, TVs, Beds, Carpets, Curtains, Kitchen Electrical equipment, Household utensils, etc. from theft or damage. Also, there is a possibility to get extra cover for accidental damage for this Landlord’s content insurance. The damage covered can be from a smashed mirror to a coffee stain on an expensive rug. But there are some things that are not covered by the contents insurance. They are
- General wear and tear.
- Computer damage caused by a virus.
- Accidental damage (unless you have included it for all your contents).
- Items when they are outside your home. For those things, you need personal possessions cover.
Landlord’s Building Insurance
Before taking the Landlord’s Building Insurance, one must know the rebuild cost of their building. Since the building insurance protects the mortar and bricks of the property, this is one of the main types of cover that a landlord will need. If your building was caught with fire or flood, then this Buildings Insurance will cover the rebuilding costs. This type of lamdlord insurance covers your property for loss or damage including
- Fire or smoke.
- Theft, Vandalism or Malicious Damage.
- Lightning or Storm (gates and fences are excluded) or earthquake, etc.
- Burst pipes.
- Oil or water leakage.
- The impact caused by vehicles, animals, falling trees, aircraft, aerials, and masts.
Some of the surprising additions building insurance typically covers includes damage from
- Car and lorry collisions.
- Subsidence, i.e., when the ground shrinks under the building.
- Heave, i.e., damage occurs when the ground expands under the building.
- Water and oil leaking from pipes or heating systems.
Thus Building insurance is one of the best landlord’s insurance cover for the homeowners. But the damage caused by insects, birds, pests or anything that happens if your home has been empty for more than 30 or 60 days.
Landlord’s Liability Insurance
The policyholder can add this Landlord’s Liability Insurance as an additional cover to most of the policies and also often a requirement if the policyholder offers student or social housing. This type of coverage will cover you will cover you against tenants who may try and charge you for an accident that occurs on your property.
Loss of Rent Insurance
If your land or property becomes unsuited for living due to any reason and also you can’t rent it out for a certain period, then any rent the insured miss out on can be protected by the Landlord’s loss of rent insurance. This type of insurance is particularly important if you have taken out a large mortgage on the property, and are depending on the rent to meet the monthly repayments.
Rental Guarantee Insurance
The Rent Guarantee Insurance is designed to protect the house owner if their tenant fails to pay the rent. This type of Insurance covers the rental building and personal property such as tools, furniture, appliances, stored on-site or provided by you for use by your tenants. So, this Landlords Rental Guarantee Insurance helps you in times of some calamities, or loss of rental income or legal expenses earned to fight the tenant. But this type of coverage excludes water damage of fixtures or other fittings, in case there is a pipe burst out.
Landlords Home Emergency Cover
The Home Emergency cover of Landlord’s Insurance will protect the cost of arranging emergency repairs such as a gas leak, burst pipe, break-in or pest infestation at your property. It also ensures a fully qualified tradesman to sort out household emergencies, 24 hours a day, 365 days a year.
The type of landlords insurance you need will depend on the risks you want to insure. Buildings insurance and property owner’s liability insurance are important covers for most landlords, and contents insurance is useful if your property is furnished. So, choose one type as per your requirements or add some as an additional cover to your policy.
Why do I need a Landlord’s Insurance ?
If you rent out a property, then it is a good idea to take landlord insurance. A Homeowners Insurance policy helps you to protect yourself, your property, and your tenants. It also covers a lot of the same things that your regular home insurance does, but it goes further, covering the risk that comes with a rental business too; whether you rent out one house or ten flats. Being a landlord comes with risks that you don’t have when you live in your home. Imagine if your tenant gets hurt you could be facing a legal claim. If you own a Landlord Insurance, then you may stay at peace.
Is Landlord Insurance mandatory? No, it is not compulsory, but some lenders will make it a requirement of taking out a buy-to-let contract. A perfect landlord’s insurance policy can include some useful features to the insured, such as buildings insurance, financial protection against loss of rent, accidental damage cover, etc. So, you have to opt the best one as per your needs.
What level of landlord insurance do I need?
Your amount of landlord buildings insurance should be based on the rebuild value of the property, whereas the landlord contents insurance is based on the replacement value of your contents. Most insurance companies offer standard cover limits for other insurance types like tenant default and legal expenses.
Companies offering Landlord Insurance
No two insurers cover property owners the same way, that means the policy options and prices will vary, as will available discounts. Then How to find best Landlord Insurance policy? among different Insurance Companies available in India. A good land lord insurance policy should include buildings cover, and cover your property for accidental damage. So, go through this section and choose the best Landlord Insurer. The subdivision of General Insurance Corporation of India such as National Insurance Company, New India Assurance, United India Insurance, Oriental Insurance, etc. will provide Land lord Insurance to the individuals by giving the guarantee to your house and valuables. But besides these government companies, there are also many private insurance companies will offer the lamdlord insurance such as Royal Sundaram Alliance, ICICI Lombard, MetLife, Tata AIG, Bajaj Allianz, etc.
What is the Cost of Landlord Insurance policy ?
The landlords insurance cost will depend on the coverages and the levels of coverage you choose. The price of Landlord Insurance policy also depends on property type, location, and tenants. Before buying a policy, you will be searching for How much is landlord insurance? What is the cost of Landlord Insurance? The truth here is, there’s no such thing as an average cost for landlord insrance. The amount you pay for your insurance policy is called your premium, and it is based on a number of factors. Also, average premiums for a land lord insurance vary across the states and territories, as does the percentage of rental income they account for. But you can easily find out how much your lamdlord insurance will cost by running a quick quote online.
The value of your property, size of your property, number of properties you are insuring, geographical location and known risks in the area, how much liability you want to add for, etc. are the different factors through which the premium amount is decided. Review carefully what is included in the basic policy before you buy and then discover if that coverage meets your needs.
Some additional costs may include:
- Legal fees for advice from a real estate attorney.
- Cleaning costs between tenants.
- Maintenance of the rental property grounds.
- Lock changes between tenants.
- Upkeep and repairs for appliances, carpeting, fixtures, and paint.
- Property management costs, in case you are hiring a management company.
- Property taxes, etc.