Real estate values have increased after a post crash recession. The rise in real estate values, the availability of foreclosed properties and the popularity of renovation television shows has encouraged more people to invest in real estate. In the excitement of becoming a property owner, people who want to become landlords sometimes forget the importance of insurance.
Landlord insurance provides protection for property owners who own rental property. It is important, as a landlord, to have the proper protection.
If you own rental property, it is a smart move to purchase landlord insurance. Otherwise, your investment and assets are vulnerable to lawsuits and other threats.
Landlord insurance is a policy that protects rental property from loss. It covers losses that occur due to fire, storms, vandalism, and natural disasters. The policy might also cover the landlord’s personal property within the building. Landlord insurance would also cover liability if a person is hurt on the property. Note that this policy does not protect the renter’s property. It is for the landlord only.
Landlord insurance is not the same as homeowners insurance. They are two separate types of insurance. Landlord insurance is for rental property. If the property owner rents the property for income, and resides elsewhere, then the property owner is a landlord. Some landlord’s live on the property that they also rent, but usually the landlord lives elsewhere.
This type of insurance is important because the risk of loss is greater. Some tenants do not care about the upkeep of the property, at least not as much as a landlord does. That means a tenant may be more careless, and more likely to cause damage.
If the landlord purchases property with the help of a lender, such as a bank or credit union, then they are required to have landlord insurance. The lender cares about insurance because the property is their investment as well. A lender might periodically check to make sure a landlord has landlord insurance, and is paying as promised. This is because without insurance, the property is at risk, and that concerns the lender.
Regardless of the lender, any landlord should have insurance protection. It is the best way to protect the investment.