Did you know landlords make an average of $97,000 a year?
If you're ready to cash in on passive income, becoming a landlord may be the perfect solution. But rental properties come with their own unique challenges. Tenants who sue and bug infestations that shut down the building are just the beginning.
Luckily, there's a way to expect the unexpected: landlords insurance. Keep reading for nine handy types of insurance a landlord must-have for peace of mind.
1. Property Damage
This is the most basic and necessary of landlord insurance types. Property Damage Insurance protects you from flood, fire, and earthquake damage.
It also covers you in the case of electrical or gas damage. And it will pay for damage done to your property by the tenants themselves.
The best policies cover replacement costs rather than cash value. This means if you have an old screen door that's worth five bucks, and your tenant breaks it, the insurance will give you $100 to buy a new screen door.
2. Rental Default
If you have a termite or rodent infestation, or you need to fumigate for mold, your property will be uninhabitable for a while. During that time, you won't earn any income.
This type of landlord insurance guarantees you that lost income.
3. Liability Protection
If your tenant gets injured because of faults in your property, such as an icy path or structural collapse, you could be held liable. This insurance covers you against their medical and legal fees.
4. Water Coverage
This form of landlord insurance protects you from water damage due to plumbing backups, sewage issues, and burst pipes. It is different than flood insurance because it doesn't deal with natural disasters, only plumbing.
5. Legal Costs
Tenants are unpredictable. They can refuse to pay rent, refuse to leave during an eviction, and sue you for just about anything. If you need legal representation, this insurance will cover the costs.
And if you don't enjoy managing your own property, consider Gulf Coast Property Management. We cover most of southwest Florida, from Bradenton to Lakewood Ranch, Sarasota, and Venice. Gulf Coast will assist in managing your properties while you sit back and enjoy the rewards of passive income.
6. Emergency Coverage
If your tenant has an emergency situation, such as getting locked out, this insurance can help you. It will pay your travel expenses if you need to handle the situation in person. It will even cover the cost of fixing the problem, such as replacing the locks or making duplicate keys.
7. Guaranteed Income
If your tenant can't pay part or all of their rent, this insurance will help you make up the difference. Guaranteed Income Insurance typically covers the amount of time it takes for you to handle the eviction process.
8. Security Deposit Insurance
Asking for a large upfront security deposit can dissuade potential tenants. This insurance provides you with an alternative.
When you have this coverage, your insurance provider will pay for damage, cleaning, or unpaid rent when your tenant leaves.
9. Renter's Insurance
This last one is not technically a type of landlord insurance, but it is still very important.
Your insurance only covers your property. If your tenant's stuff is stolen or damaged, they may hold you responsible. Save yourself stress down the road by requiring your tenants to purchase renter's insurance.
You can let them choose their preferred provider. But feel free to stipulate details about what you want them to get covered.
Protect Yourself With Landlords Insurance
These nine kinds of landlord insurance will provide you with excellent peace of mind. From broken water lines to tenants who refuse to pay, insure your property rental business with landlords insurance.
We hope this handy list answered your question, "What kind of insurance do I need as a landlord?" And if you need more advice on rentals, contact Gulf Coast Property Management!
Here at Gulf Coast, we can help you with all your landlord needs. Contact us today for more information!