When most of us think about Landlord Protection, we think about the possibility of a fire burning down our rental home. Displacing the renters, the possibility of losing the rental income because we have to rebuild the rental home before we can receive the rent income back. What a headache, right? Well that may just be the half of it. What many landlords don’t think about is the likelihood of being sued because of the loss of life or serious injury to our renter.
Even if the renter is the cause of the fire, they have the right to sue you in the event of any loss; whether this loss is injury to their body, their possession’s, and their time away from work. Although most jurist would not see the logic in awarding a suite to the initiator of a fire or any other cause of loss to your property, there have been cases that logic is not necessarily the primary objective of the jurist decision to award the claimant.
Being sued is a consideration an all cases; keep in mind that there are other major cost to responding to a personal suite even if you win the judgement. A local case in Colorado Springs saw the landlord paying over $60,000 in attorney cost just to avoid being sued by a woman who was intoxicated and fell on the ice in front of the landlords building and injuring her back.
Most Landlord policies’ can be adjusted and customized to meet your particular needs. For example, if you want coverage for catastrophic loss only, you may increase your deductible to a larger amount such as $5,000 and purchase a cash value policy that will only cover your building minimally. You may also increase your coverage to be comprehensive, covering personal property such as appliances, premise theft, vandalism and malicious mischief and 100 percent of replacement cost; (rebuild value), associated with most loss.
Landlord Building coverage:
Keep in mind that banks and building societies are likely to insist on building coverage as a condition of a mortgage, particularly a buy-to let mortgage.
The right buildings insurance will cover the cost of rebuilding or repairing your property following events such as:
- Storm, floods, lightning or earthquakes
- Damage to water, drainage or heating installations
- Collision by vehicles, machinery or animals
- Falling trees or branches
- Vandalism or other malicious acts
Loss of Rents:
Loss of rent insurance covers income lost if your property becomes uninhabitable and your tenants are forced to move out while another claim is honored. This is usually included as part of your buildings cover.
Landlord Contents insurance:
The level of contents insurance you need is largely dependent on whether you’re renting you property furnished or unfurnished, but it’s important to think about in either case. Some insurance policies may include a minimal amount of property coverage already to cover basic items such as carpets, and whit goods.
Accidental Damage coverage:
Accidental damage is usually included as part of a building or contents insurance policy, but not always, so be sure to check with your agent. It should cover damages not caused by negligence, recklessness or misuse.
Landlord Emergency Coverage:
Landlord emergency cover could help in the event of a crisis such as a boiler breakdown, bust pipes or even lost keys. Some policies will cover the cost of alternative accommodations for your tenants if the problem makes the property inhabitable.
Landlord Liability Coverage:
Landlord liability insurance could cover you in the event of the injury or death of anyone on your property, and also protects you against litigious tenants who may try to sue you following an accident. If you rent your property to students or persons on housing benefits, the university or local authority may stipulate a minimum level of coverage.
You may wish to add coverage called Employer’s liability, which will cover in the event of death or injury any person’s you employ on a casual basis at your property such as handyman or gardener.
Rent Guarantee and Legal Expenses:
Some policies will offer Rent Guarantee if the tenants default on their rent payments. Legal Expenses would also be covered if you would have to attend court to retrieve those cost legally.
Unoccupied Property Insurance:
If after 30 days with no occupancy, the insurance coverage is void of risk to burglary, vandalism and weather-related damage.
Key Landlord Insurance Points:
- Landlords need insurance designed for landlords- a standard home policy will not extend coverage if the home is being rented.
- Your insurer must be notified every time a tenancy change take place. If not, claims may be voided.
- Many insurers will offer discounts if you buy building and contents insurance together and special discounts for multiple rental properties.