As a landlord, there are a multitude of worries regarding property. Landlord building insurance is meant to ease the worries about what would happen if a catastrophe or a common mishap were to damage the property. Landlord building insurance does more than repair damages for covered losses; it can also protect a landlord in certain legal situations.
Landlord building insurance should cover the costs to repair or rebuild the structure should a covered loss occur. This type of policy does not cover damage to tenant contents. Tenants need to purchase renter's insurance or a tenant's policy for such coverage. The building insurance is strictly for the dwelling or structure, although it can cover other structures on the property, such as garages. This policy should also include general liability for personal injury or property damage covered under the liability portion of the policy.
Liability coverage may be necessary for times when there is negligence on the part of the property owner, but also when there are building defects. Building defects can include issues with the stairs, elevators, electrical wiring; the list goes on. Liability coverage can also aid if a lawsuit is filed against the landlord regarding a covered loss. Generally, a claim will have been filed first, but legal expenses and legal counsel should be provided.
Building insurance and liability coverage will be offered under a different type of policy for commercial structures. Typical landlord building insurance policies are only for residential rental properties, such as apartment complexes, rental houses, vacation houses, etc. Commercial structures may have more than one tenant or business, and they have specialized insurance needs.
Covered losses or perils under a typical landlord building insurance policy include fire and smoke damage; storms, including lightning and hail; damage from a fallen tree or limb; water damage stemming from negligence or burst pipes; damage from a vehicle; and vandalism. In some parts of the United States, flooding is not a covered loss and a special endorsement must be added. This is also true of wind damage and storm damage for specific parts of the United States.
Landlord building insurance can also often aid in the loss of income resulting from a covered loss. In some instances, a landlord will lose business when repairs or rebuilding is being done. This also means a loss of income, because the property is unable to be rented. If the landlord is able to show proof of this loss, the insurance company may reimburse him.
Landlord building insurance can be a great asset for property owners; however, some policies can be expensive. Prices will rise as additional endorsements are added or limits are raised. Investment property owners should review policies and determine the appropriate amount of coverage for each property to ensure they receive the right policy with the right amount of coverage.
