What Does Landlord Insurance Cover?

As a landlord, your rental properties may provide lucrative income streams. However, owning and renting out premises also includes many risks and exposures. Damage inflicted on your property by various perils, disputes with tenants and accidents affecting other parties could all have significant financial ramifications. Considering these circumstances, you should prioritize understanding, acquiring and maintaining adequate landlord insurance. 

How Does Landlord Insurance Work? 

Landlord insurance may provide a versatile and robust financial safety net for you and your rental properties. This type of coverage, also known as rental property insurance, can offer financial protection from many common perils and incidents, including fires, lightning, hail, theft and vandalism. By purchasing and maintaining a policy by paying regular premiums, you can secure and retain access to such financial assistance to limit out-of-pocket losses that might otherwise have catastrophic consequences. 

What Losses May Be Covered by Landlord Insurance? 

An adequate landlord insurance policy includes several components that provide versatile financial security across various risks and exposures. These policies may be customized to suit your needs, preferences and budget, but you should typically ensure that your insurance includes coverage for the following: 

• Property damage—This coverage may include the physical structure of your rental properties and your personal belongings, such as furniture and appliances provided to tenants or equipment (e.g., lawnmowers and snowblowers) left at the premises for maintenance purposes. 

• Landlord liability—If you are accused of being at fault for the losses of a third party, including tenants, guests and passersby, this coverage may help pay for your legal costs and insulate you from resulting financial losses. 

• Loss of use—This part of your landlord insurance policy may help you recoup reduced income if a covered incident makes your rental property temporarily uninhabitable, thus rendering you unable to collect rent.