5 key clauses of landlord insurance policy

Being a landlord is great as one earns a great deal of money by renting the house which he has purchased. It is essential to buy an insurance policy that ensures you are completely covered in case something wrong takes place.

There are various critical clauses in landlord insurance policy which you can consider while creating or converting it.

• Dwelling coverage with "guaranteed replacement cost"

The most basic type of coverage is dwelling coverage and if you don't own the property the lender will tell you to buy it. Dwelling coverage protects you from paying any financial costs in case something happens with the structure of your property. There is a list of things that are taken care of by it:

1. Plumbing and gas systems

2. Issues related to the structure

3. Cable and piping

4. Internal fixture and fittings

5. Outdoor installations blinds awnings

Guaranteed replacement costs will pay you for replacing or rebuilding the property.

• Water and Flood Coverage: water and flood insurance policy is an extra policy that is purchased with the base policy. It covers the damage which is caused to building and anything in it due to water. Extra flood policy covers floods, drains, sewers, backups, water issues and natural disasters under it. The cost of water and flood coverage will be the same no matter who is purchasing the policy.

• Personal Property Protection: It is generally purchased by the landlords when they are giving a well-furnished apartment to the tenants. Some prefer to buy it while they rent out an empty apartment to someone. If any damage takes place to the belongings such as furniture, curtains, carpets, appliances and light fixtures it is taken care of by this type of cover. It is better to get home insurance quotes from various insurance firms and choose the type of coverage that will be best for you.

• Acts of Nature: Acts of nature include disasters such as Tornados, Hurricane, earthquakes, and riots. There are certain places where you need a specific type of insurance cover. If such a clause isn't included in the insurance cover you can ask for it. See the pros and cons of every insurance cover and then try to buy it.

• Fair Rental Income Protection: In this insurance cover you can collect the rental amount of property for a certain time period. Most of the standard insurance covers don't include lost rent due to eviction or dead beat tenants. You might find buying it a great deal initially but your premium will rise high if you will add this insurance cover. It is advisable not to pay the premium of loss of income coverage as it might impact your finances for years.

• Medical and Legal Coverage: One doesn't have to pay expenses from his pocket if a contractor or tenant sues you for damage to the body or the property. The insurance will take care of these inconveniences for you. Examples include falling or slipping. This is included in the insurance policy as the out of pocket expenses sometimes go out of control for a tenant.

What to include in Landlord insurance policy?

Most of the people leave their places and move to some other place for work, study or any other reason. They need a house to live in and it is not easy to find a house when you have moved to a new city. Before you buy property on rent it is better to go through the terms and conditions. There is a list of things that you can do before renting out your property:

• Clean, Repair and Prepare the property to reduce injuries and subsequent claims

• It is essential to work with the attorney and carefully tell about your property which will get you maximum protection.

• Go for a home insurance policy that gives you maximum insurance which is in your budget. Add any extra endorsements to get maximum protection.

• Consider putting your rental property in an LLC order with which you can protect your personal assets in case the renter files a lawsuit against you.

Here is the list of some of the optional riders that you can include in your landlord insurance policy:

• Building Code Coverage: If your area codes have changed from the time you built your house. It is essential to adhere to current codes if your home is damaged and currently needs repair. It will include additional costs that take place when you are renovating your house.

• Non-Occupied Dwelling Endorsement: If your property is lying vacant for a month or 30 days. The insurance company may deny the claims to you after a period of 30 days. This optional endorsement will extend your coverage for 30 days.

• Heating or Air Conditioning Loss Reimbursement: It involves any payments you give to your tenants if any mechanical breakdown takes place in the heating and cooling system of your property.

You can avail discounts if you buy multiple policies for landlord insurance. Once you will receive landlord insurance quotes you can compare prices of multiple insurance policies and choose which one is the best for you.

A person buys a house with his hard-earned money and if something happens to the house intentionally or unintentionally the landlord has to get it right by paying it from his pocket. It will put his current household expenditure at stake. He also has to make sure that the people residing in his home are safe and should abide by the rules which are laid by him. It is essential to invest in an insurance cover that prevents you from repairing the damage from your household expenses and will add unnecessary stress on you. One must include personal liability coverage with the standard insurance as it will prevent your personal belongings from damage. Make sure that your house and people residing in it are safe in case any unpredictable incidents happen in your house.