Rental Property Liability Insurance: What You Need To Know
Did you know even if you don’t own the building you rent out, you still need to think about taking property insurance seriously?
Property liability insurance is a crucial defense against the financial risk involved with people renting your property. This is true if you’re renting out an investment property, house, condo, or holiday home even.
This type of insurance protects you against the hazards of renting out your property for an extended length of time. So now, let’s delve a little deeper into property liability insurance in this short guide.
What Does Property Insurance Cover?
Property insurance plans vary in coverage. But, they often cover the dwelling or structure of a property. They also cover any contents within a landlord’s property, liabilities, and rental revenue losses.
Much of its coverage is comparable to homeowners insurance. But, it includes additional elements that homeowners insurance does not. This can include coverage for the risks of allowing renters to reside in your rental property.
Here’s a summary of the primary coverages you should get:
- Dwelling coverage
- Landlord’s contents coverage
- Loss of rent coverage
- Liability coverage
An insurer should include all of these coverages in a good property liability insurance policy. Property Insurance HQ is a great example of such an insurer.
Insurance Policy Levels
When looking for property insurance for a rental property, you may find different “forms” available. These forms are different coverage levels. Varying types of this insurance provide different levels of coverage, similar to homeowners insurance.
The forms you will come across can include:
DP-1 is a dwelling insurance policy. It is often the most inexpensive policy you can opt for in property rental. It’s also pretty basic in what you get for your money. You could expect such a policy to cover you only for perils that the insurers have listed.
It’s typical for a DP-2 policy to give you more extended coverage. It should cover you for the perils like with DP-1 policies. However, you might also get coverage for instances of burglary damage, for example.
DP-3 is the priciest type of insurance out of the three. Yet, you get comprehensive coverage for what you pay for. You’ll have extensive coverage against perils, and insurers may include various other benefits.
Additions to Your Policy
Property liability insurance coverage varies from insurer to insurer. Coverage, typical to one policy, may be unavailable or optional with another.
Below are two examples of popular endorsements that landlords tend to add to their insurance policy. We also recommend comparing quotes to discover the best coverage and pricing for your specific needs.
- Vandalism coverage
- Law or ordinance coverage
Vandalism coverage concerns physical damage inflicted on your property. Law or ordinance coverage concerns lost value or costs due to the enforcement of local laws when repairing any damage.
Getting Property Liability Insurance
Now you should know some of the basics to help you choose the right property liability insurance for you. And remember, even if you don’t own the property, you should still consider getting a policy.
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