Are you an accidental landlord? These days the number of homeowners have increased that have tried to unsuccessfully sell their home and have decided to rent their homes. This idea has great potential for revenue seeing as rental prices in the housing industry have increased 22.7% since 2007 and has been climbing.
However, landlords need to revisit their homeowner’s insurance policy now because chances are the policy you have currently does not cut it or qualify for what you need. Here are some common questions:
1. Do I need landlord insurance?
If you are renting a unit for more than a couple weeks during the year, you should look into a separate policy. When you don’t update your policy or look into a landlord policy chances are when you place a claim it will not be covered.
2. What will landlord insurance cover?
There is an obvious need for insurance if a renter or guest of renter should injure themselves on the property. Land lord insurance also covers the cost when a renter does not take care of the property and there is sufficient need to cover that expense. Also, there is a need to cover the liability of damages from fire, ice, wind, and theft. While looking into your policy, you may want to look a policy that covers lost rent income when a tenant terminates the lease early. This may cost more, but in the long term may cover loss instead of the unit sitting empty during the winter months when moving is not in tenants agenda.
3. How much more is a landlord policy?
Expect to pay about 15-20% more your homeowner policy. So if you are paying $800 for your homeowners insurance on an annual basis, expect your landlord policy to cost $960. This cost is rising currently, so you should do some research before going with one particular company to make sure that you are not paying too much.
Although, on paper being a land lord may seem very cut and dry and simple there will be many decisions you will have to make that will make or break the situation. In the case of liability, you will want to make sure that your bases are covered, because you never know what will happen in the future.