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What is Landlord Insurance?

By Venus D.
Updated May 16, 2024
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Landlord insurance serves to protect landlords during circumstances where they are prevented from using their property to earn an income.

These circumstances include legal disputes between a landlord and tenant. If legal expenses are purchased as a part of the insurance coverage, landlords will be compensated for any related legal fees. In cases where the property damaged to the point that it is inhabitable, landlord insurance will help cover the costs to repair the damages as well as compensate the landlord for the loss in rent collected during the rebuilding. Like all contracts, the precise language of the insurance coverage must be carefully reviewed to understand precisely what is and is not covered. Coverage may be limited to damage of the interior or exterior of the property.

Because of the variety of coverage available, landlords are often advised to carefully consider different options before buying an insurance policy. Comprehensive insurance provides coverage for all types of situations except those specifically excluded. In contrast, peril policies generally cover fewer types of damage and list only those losses that will be covered. Potential policy holders are also often advised by insurance companies to not only consider possible property damages, but also libel, slander and discrimination.

Landlord insurance generally offers two methods through which property losses can be settled: actual cash value and replacement value. Landlords generally pay a lower premium for actual cash value settlement, since they will receive compensation only after deprecation is subtracted from the current value of the property. With replacement value settlement, compensation will cover the necessary costs of replacing the damaged property without considering any deprecation. Property, however, will have to be replaced in order to qualify for this settlement. If it is not replaced, settlement, by default, will likely be actual cash value.

In addition to choosing the actual cash value settlement method, another option for reducing the premium for landlord insurance is to increase the deductible. The deductible is the amount of money the policy holder himself will pay to recover a loss. Higher deductibles can also result in discounts.

Because landlord insurance covers only the property and the rights of the landlord, tenants can greatly benefit from renters’ insurance. Damages to personal belongings or another person’s property within a tenant’s residence become the responsibility of the tenant. Renters’ insurance will provide liability coverage and, in some cases, it could also cover pertinent legal expenses. Renters’ insurance, similar to that offered to landlords, has a variety of options for coverage.

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Discussion Comments
By anon287122 — On Aug 23, 2012

Don't forget to also talk to a professional about getting a solid "umbrella policy." It functions as an umbrella that covers you in case you lack enough coverage because of a lawsuit. I also have had a prepaid legal membership for many years that serves as a "legal" insurance for me.

I can ask tons of questions and I have tons of legal hours of coverage paid for!

By anon218473 — On Sep 29, 2011

Do you need landlord insurance if you have building insurance?

By anon93022 — On Jul 01, 2010

Can a landlord require a tenant to only get insurance through their insurance and no other?

By TerriFain — On Jun 29, 2010

I live in an apartment, where a vacate apartment was flooded due to management leaving a return value line off of a toilet. It flooded the apartment below the vacate one- severely! My apartment sustain some water damage to two of the bedrooms. The walls have some water damage and the carpet. Management pulled the padding and carpet up in one bedroom and place large blower in the bathroom, closet, and in the room itself. In the other room, they placed just a blower the carpet, which smells terrible. I have not been able to use either bedroom in the less two week, I was told I have to wait until carpet is order and management is not liable for placement due to this inconvenience. Also, I was told I can't be compensate because I am able to reside in the resident in it’s current conditions and I did sign a waiver denying renter’s insurance. Do I have any legal rights or a civil judgment?

By anon91555 — On Jun 22, 2010

I just bought a mobile home, but the previous owners aren't due to move out until August. I am wondering if I should purchase 'Landlord' insurance just in case 'accidents' happen before they move out.

By MissMelody65 — On May 06, 2010

My mother was a victim of a violent crime inside a rental. Landlord wants to know who will pay rent that is due, who is going to clean it and she wants a 30-day notice to vacate.

Obviously my mom will no longer rent there and the crime scene evidence is limited to one bedroom. She is not allowing us to enter the property to obtain our belongings. What rights do I have at this point? Doesn't her landlord/rental policy cover something.

Please advise soon, as time is of the essence. Thank you very much.

By landlords — On Mar 30, 2010

Landlords should make sure that their buildings insurance covers “Loss of Rent” cover (usually up to 20-30 percent of the buildings sum insured). This will usually cover them if the house is uninhabitable due to storm damage or flood for example – so if the landlord’s tenant has to move out due to an insured peril then the policy will cover the rent.

This cover is normally included in most landlords' building insurance policies. This article is also correct in stating that a landlord should consider a legal expenses and rent guarantee policy – this will protect a landlord against a bad tenant.

It would therefore, in the case of a tenant not paying their rent, pursue the tenant for eviction and in the meantime cover the landlords rent. There is usually a limit on the amount of rent payable.

Referencing is also usually a requirement of these types of policy so always ask your advisor for the facts before purchasing a policy.

By anon11210 — On Apr 10, 2008

if a tree falls on a tenants vehicle while parked in the driveway, whose insurance covers the damages?

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