There are many benefits associated with being a landlord. For instance, it promises regular income since you’ll earn steady bulk income monthly or annually. Therefore, you can potentially achieve financial freedom and build wealth in no time. And since property value appreciates, you can sell your property in the future for higher return on investment.
Moreover, investing in rental property is a fantastic way of securing your future. You can use the rental income to plan for your retirement. It also offers a great way of leaving an inheritance to your children.
While there are many good reasons why becoming a landlord is a great decision, sometimes things can go wrong. And when that happens, it’s beneficial to have an insurance policy to cover your loss. Here are the most common landlord insurance claims.
- Loss Of Rent
Loss of rent is one of the most common landlord insurance claims, and it can happen for various reasons. For example, you won’t be able to collect money when a tenant defaults on their monthly rental.
Another reason is when your property is damaged and can’t be rented out for a while. In either case, it’s important to have loss of rent insurance coverage. It’ll help compensate you for the rental you’d have collected under normal circumstances. As such, you won’t have to sustain any losses on your rental property.
- Fire Damage
Fire damage is another type of landlord insurance claim, and it’s common during the cold seasons. Several things can cause fires in rental properties, including electrical shocks, candles, kitchen fires, etc.
A fire on your rental property can destroy everything. For that reason, it’s vital to have fire damage insurance coverage in place. It’ll help replace items or repair appliances and all areas of the house damaged by the fire.
- Tenant Damage
Tenant damage refers to the destruction caused to your property by tenants. And this can be deliberate or accidental. Deliberate damage may occur when a tenant tries to make alterations to the property, for instance, by drilling into floors or hammering nails into walls.
Accidental damage, on the other hand, is when a tenant damages the property by mistake. This could be due to something like spillage on the carpet.
Rectifying damage caused by tenants can cost you a lot of money, thus hurting your finances. But the good news is that you can apply for tenant damage insurance and avoid a lot of hassle. The insurance company will be responsible for the repairs and will ensure you don’t spend anything.
- Water Damage
Another common reason for claiming landlord insurance is water damage. This can result from leaking pipes, toilets, water tanks, etc. For that reason, it’s important to have water damage insurance coverage.
Generally, if water from leaking pipes and tanks destroys a building, such damage is covered by property insurance. But if it destroys the building’s contents, then it’s covered by landlord insurance. Examples of contents include carpets and curtains.
- Legal Liability
Sometimes injuries may occur within your rental property. For instance, a tenant may slip and fall or get injured while swimming or exercising in your gym. Any person injured on your property may sue you for damages.
Maintaining your property and adhering to safety standards to prevent injuries is always a good habit. However, sometimes accidents can happen, causing injuries. With legal liability insurance, however, you won’t have to worry about compensation for any injured person on your rental property. The insurance company will shoulder the cost and compensate them for the injury they’ve suffered on your property.
- Theft Insurance
Sometimes you can lose the contents of your rental property through theft. If that happens, it might force you to shop for items to replace the stolen ones. But that incurs extra costs. You can avoid that by having theft insurance coverage. You’ll only need to file a compensation claim with your insurance company and they’ll cover your loss.
Takeaway
Subscribing to various landlord insurance is one of the best ways to prepare for uncertainties. There are various factors to consider to ensure you find the right insurance company for your rental property. These include years of experience, customer service, cost, and credibility.
Landlord insurance offers you financial protection should untoward incidents arise that may affect your property or tenants, such as fire, theft, natural calamities, tenant damage, legal liability, etc. However, it’s crucial to partner with the right insurance company for you to enjoy its many benefits.