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Landlord insurance protects property owners against delinquent tenants and legal liability
Landlords are most wary of delinquent tenants and having to shoulder legal liability. Hence, purchasing a landlord insurance policy offers a suitable protection. The average consumer might assume that the typical home insurance and landlord insurance are identical products. In fact, they differ in their scope of protection. The former protects against loss of household contents from natural disasters or accidents as well as personal liability. Landlord insurance, on the other hand, not only protects the household contents of the rental property, it also protects against loss of rental income and the legal liability of the property owner.
Most landlord insurance policies cover fixtures and fittings of the premise, including improvements and betterments on walls, windows, ceilings, floors and doors. In addition, the property owner would be compensated for loss of or damage to household contents resulting from accidents during alteration or repair works. Landlord insurance also protect against legal liability attributable to the property owner, being primarily liability arising from accidental third-party bodily injuries and property damage. For instance, if water leakage damaged a neighbour's property, damages might be sought by a third party.
Some landlord insurance plans would compensate the property owner for loss of rental income under the following circumstances: if the premises are rendered uninhabitable due to accidental loss of or damage to contents; if access to the premises is prevented by damages to other premises in the vicinity; if no one is paying the rent after the tenant dies as a result of murder or suicide; if the property owner has taken legal action and obtained court judgement after tenant fails to pay rent and could not receive the payment within one month after the court ruling. There are insurance companies that offer optional building insurance, thereby providing comprehensive protection for the property owner, from the inside to the outside of the premises.
Property owners are suggested to purchase landlord insurance as soon as the lease has been signed with the tenant to ensure immediate protection. Several insurance companies already provide online application services, whereby property owners only need to input basic information in order to receive a quotation and apply immediately. The process is simple and convenient. Premiums for landlord insurance depend on the size, type, age of the building as well as whether there are additional structures such as roof terraces, gardens etc.
There is tremendous variety in landlord insurance in the marketplace. Premiums are accordingly higher if the insured amount is higher and the scope of coverage is wider. Landlords would be wise to first understand their needs before selecting suitable protection.
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