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Insurance Issues for Landlords

As a landlord, it is important to safeguard yourself from the possibility of financial loss or being held liable while you rent out your property to tenants. Situations that lead to this include but are not limited to property damage, nonpayment of rent, theft, and accidents/injuries on the part of the tenant.

In this article, we are going to tackle the topic on insurance issues. 

The law does not require landlords to have insurance although it is highly encouraged so that you get coverage in case something happens to or within your rental property. 

Here are questions that arise when it comes to insurance issues:

1. What are the 3 different kinds of insurance I need to consider if I rent out my property?

2. Should I require my tenant to show proof of his renter's insurance?

3. What are other issues I need to ask my insurance broker about? 

Let's talk about the first of these 3 questions. What are the 3 different kinds of insurance I need to consider if I rent out my property?

They are the following:

  • Property Insurance - This type of insurance covers damage to your property. This includes your flooring, ceiling, roof, and appliances. If you are a planned community with an HOA (Homeowners' association), you may have policies that cover your actual structures but don’t cover the interior of your unit. You should ask your insurance program about your coverages. 
  • Landlord Liability Insurance - Tenant injuries are unavoidable. Just in case accidents or deaths happen on your property, having landlord liability insurance can protect you if you are found liable. Do check if current policies give you general liability insurance coverage for things that happen within the unit.
  • Renter’s Insurance - Your insurance does not cover your tenants' personal belongings in the event that they get damaged or stolen. Your tenants are responsible for protecting their personal property. State in your lease form that you are requiring your tenant to carry renter’s insurance. That has to be on their to-do list. Before someone occupies your property, clearly state that his personal belongings are not covered by your policy. 

To get answers to the remaining questions, existing Landlord Prep students should log-in to the module entitled Between Tenants - Things to Do Before Renting (Insurance).

Not a member yet? Join the Landlord Prep: Video E-Course and How-To Tutorials so you can access this module and get the complete DIY landlording course. This will help you stay knowledgeable and confident as a landlord.