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What is Landlord Insurance? Definition, Cost, Providers & Features

What is Landlord Insurance and What Does it Cover?

Landlord insurance provides coverage for someone who rents out a piece of real estate they own to a tenant.  This type of insurance carries two different types of coverage: 

Both types of coverage aim to protect you, the landlord, from any unexpected financial losses.  It’s important to understand the different coverages and levels of coverage within a landlord insurance policy.

For example, with landlord insurance, there are multiple levels of policies: DP-1, DP-2, and DP-3.  As the number at the end increases, so does the coverage under the policy.  

To illustrate, a DP-3 policy might provide for replacement cost in the event of a theft of home contents whereas a DP-1 policy might only provide partial replacement cost as a cash payout.

As we’ll see later, other optional coverages exist in the landlord insurance coverage universe and may be called for depending on your unique financial situation.  

However, they don’t come without added cost and should be balanced against the likelihood of a loss occurring under these coverages.  As with everything, don’t pay for what you don’t need or at least aren’t likely to need.

Related:

Landlord Insurance Property Protection

Turning first to property protection covered under landlord insurance, this helps cover physical property related to the home you’re renting.  In my case, my condo’s walls, contents (i.e., hot water heater, immobile appliances, my built-in Murphy bed, etc.), and any other equipment kept on site for maintenance purposes.

This coverage generally includes three primary items:

  • Dwelling – This coverage pays for repairs to the home, condo or apartment in the event of damage resulting from fire, lightning, wind, hail or other losses covered by the policy.
  • Other StructuresThis policy element pays out if you need assistance paying to repair detached structures (e.g., a shed behind the rental property, fence, etc.) on the property if they’re damaged by a covered loss.
  • Personal Property Used in Service of the Rental – You likely own equipment used to maintain your rental property during showing season or usual upkeep of the property during periods of occupancy.  This portion of the landlord insurance policy covers this equipment in the event of a covered loss.  Of note, this does not include your personal property not used in the maintenance of the property.  If you leave your bike at the property and it gets stolen, sadly, you’re out in terms of recovering against that loss.

These coverage types are all subject to policy deductibles, and much like health insurance, some have higher deductibles than others.  Additionally, these insurance policies are also subject to coverage limits.  If your losses exceed these limits, you won’t have success recovering these costs through this landlord insurance policy because your insurer will say you should have carried more coverage.

This limit, the maximum your insurer will cover you against, can vary and will cost more as you purchase more coverage.  Of note, each coverage typically has its own, separate deduction and limit and can be priced according to your needs and personal budget plan.

Landlord Insurance Liability Protection

The liability portion of your landlord insurance policy will help to protect against legal expenses if someone is injured on your property or for related medical bills, should you be found responsible.  A common example is if a tenant would fall down a set of stairs on the property and a court finds you failed to maintain the stairs and/or railing in an adequate manner.

In this case, you would be required to pay for the tenant’s medical, legal and other related expenses.  This is where having landlord insurance with liability coverage comes in handy.

The amount of coverage can vary but typically comes available in standard $100,000 and $300,000 variants.  My personal landlord insurance policy carries the latter and should be more than sufficient should I ever have the need to file a claim against my policy.

Also of note, you likely won’t pay a deductible for a liability claim against your landlord insurance.

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