In today’s economy, landlords need to protect their rental assets. This ensures they receive the most comprehensive coverage at the best pricing. Renters need to protect their assets and liability not covered by the landlord’s policy.
Landlord’s and renter’s insurance protect you from financial loss. This loss can result from accidents, natural disasters and injuries. Moreover, other liability issues that are associated with your rental or rented property.
Landlord’s insurance provides reimbursement for loss of rental income. Additionally, it can also cover repairs or even the entire replacement of a rental property’s structure. However, the rental income coverage does not include paying the tenant’s costs to live elsewhere during a covered loss. We will discuss this coverage in the renter’s insurance policy.
How Much Is Landlord Insurance?
The cost of landlord insurance can vary considerably based on some factors. You may see rates as low as $500 per year for a small rental unit. Or several thousands of dollars per year for a larger property with a swimming pool.
Renting out a house that you eventually plan to sell? You may pay about 25% more for your landlord insurance than for homeowners’ insurance.
Some of the factors that will affect your premium costs include:
- Your geographic location and any known risks in the area.
- The size of the structure.
- How many rental units you have.
- The age and condition of the building.
- Whether your electrical wiring is up to current code.
- If you allow smokers to rent from you.
- Whether your complex has a swimming pool.
- The type and amount of coverage you are purchasing.
- Whether you have fire sprinklers installed in your rental units.
- If the complex has gated access.
- Whether you have burglar alarms.
In addition, landlord has more risk than regular homeowners. This is due to tenant exposure. With the right landlord policy, you can ensure you and your assets have the necessary coverage.
How Much Is Renters Insurance?
As a landlord, renter’s insurance policy is becoming a common requirement in the lease. Plus, the renter’s policy will protect the renter and the landlord in case of loss.
Assuming that your landlord’s insurance protects your personal property is a mistake. Without renter’s insurance, you’re at risk of losing all your possessions. Many people don’t realize that rental units’ owners buy only enough insurance to protect their investment.
A good start for most clients is a minimum of…
- $25,000 in personal property coverage
- $100,000 in personal liability insurance
- $1,000 per person in medical payments coverage
This policy typically costs $200 or less per year. Additional living expense is a coverage that pays up to the policy limits for the tenant’s additional expense to live elsewhere during a covered loss from their claim or claim from the landlord’s policy.
Therefore, when you buy renter’s insurance, it will protect your possessions against losses from different types of disasters. These include
- Fire or smoke
- Water damage not caused by floods
In addition, most policies also have off-premises coverage, so that property taken outside of the home or in your auto remains covered. A basic policy typically covers the replacement of lost property at actual cash value.
Just like home insurance, a renter’s policy provides liability protection. Moreover, it will pay for the losses of injured people or property damage because of your actions. It can also cover for the actions of members of your household, depending on your policy limits. If you become the target of a lawsuit, your liability coverage will pay your legal bills.
About the Author
Rick Hatcher joined JSW Insurance in 2020 and has 22 years of insurance experience insuring the greater San Francisco Bay Area, Livermore, Tri-Valley, and all of California, Washington, Nevada, Oregon, and Arizona, protecting the property owner and renter, their families, and assets. Rick runs Eden Urban Farms. He educates the community on raising certain animal life at four farm locations, including a community garden. Relaxing for Rick means running and hiking the local hills and training for his next half marathon.
Find out more about the landlord’s insurance and renter’s insurance. Visit the JSW insurance website to discuss it with them.