Landlord rental insurance is important to have for any rental unit regardless if the mortgage is paid off. This policy protects the property and rights of the landlord for a fee much less expensive than standard homeowner’s insurance. The home and all structures on the property are protected from damage caused by tenants, harsh weather, or unforeseen occurrences.
Landlord insurance reimburses the repair of those damages. Cleanup and repair due to water, sewer, drain, or sump pump backups are included. Damage caused from lightening, high winds, and hail are addressed as well as fires and explosions. During the remodeling and repair process, any loss of rent from vacancy is reimbursed to the landlord for up to one year. Structures on the property such as a garage or shed are also covered. Although the tenant’s personal property is not covered, any personal property owned by the landlord stored on site or left for use by the tenants is also covered. Landlords are also protected if the tenant or a visitor is injured on the property.
There are different types of rental home insurance available. Comprehensive insurance covers most situations and specifies anything not included. Peril policies provide less coverage and list exactly what is covered. Landlord rental dwelling insurance is for buildings housing one to four families. Landlord condominium insurance is for condominiums.
There are generally three payment methods after damage claims are filed and approved. Actual cash value considers depreciation when calculating reimbursement figures. Replacement value does not consider depreciation when paying replacement costs. Agreed loss settlement is the amount paid upon the total loss of the home which matches the amount declared on the policy.