The Most Important Clause in a Landlord Insurance Policy

The Most Important Clause in a Landlord Insurance Policy

Standard property insurance assumes that you are living in the property, but as a landlord, you most likely do not. This is why there is landlord insurance offered by most insurance companies. Not all landlord insurance policies are created equal, so you should make sure that you have the right insurance for your property. Many times, having the wrong type of insurance can lead to your claim being denied outright. There are many clauses that can be included in a landlord insurance policy, but there are some specific ones that you should look for when you choose a policy.

 

  1. Dwelling Coverage that Includes Guaranteed Replacement Cost

 

Dwelling coverage is similar to home insurance but covers the properties that you are not living in. Some lenders will force to you have this type of insurance, especially if you do not own the property outright. This insurance will cover the cost of replacing the dwelling if there is any damage to the structure of your property.

 

Guaranteed Replacement Cost coverage is important because it will cover the total amount that it takes to replace or rebuild the property. This is even if the total cost of the building materials and labour costs are more that you had the property insured for. Not all landlord insurance policies will include this clause, so you may have to shop around to find it.

 

  1. Flood and Water Coverage

 

This coverage is most times an add-on that you can add to your basic insurance policy. While it is not required for most properties, it is highly recommended. This is because it covers any water damage that happens to the building. The amount of water damage that is covered by this type of insurance will depend on the company that you are with. Most insurance companies will provide you with a list of what their policies cover and what they do not.

 

  1. Personal Property or Content Protection

This is not required, but it is very handy when you are renting out a furnished apartment. It can also be helpful if you are renting an empty apartment because it can cover your flooring, walls, and light fixtures. This can help with replacing these items if they are damaged, but if a tenant causes the damage, you may not be covered.

  1. Acts of Nature

 

Mother Nature can do a huge amount of damage to a property very quickly. Most insurance policies will not cover acts of nature unless you have upgraded your policy. The type of coverage that you will need will depend on where you are located and what type of weather that you are most at risk for.

 

Landlord insurance is very important for anyone who owns property that they are renting out. The issue is that most landlords do not know about this type of insurance and end up with huge bills because their insurance claims are denied. Instead of taking this risk, you should have landlord insurance for each one of your properties.

 

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