Do You Have the Right Insurance for Your Rental Property?
Having the wrong insurance policy for your rental property could cost you thousands of dollars. Often, landlords believe a homeowners policy is enough, but it’s not always enough to cover the added liability of renting your home to tenants.
Listen to our webinar with State Farm® as experts discuss what policies you need to be protected. Further below, we’ll answer real landlord questions from our webinar.
The webinar covers:
- Benefits of insurance for property owners
- What policies do and do not cover
- Why your renters need renters insurance
- Live questions from the audience
Questions on Rental Property Insurance
What is the best policy for a landlord to have to protect their properties?
As a rental property owner, you should consider policies that provide:
- Coverage for the appropriate dwelling type, such as a single family home, duplex, apartment and other structures on your rental property, like a shed or detached garage
- Coverage for personal property if you rent your dwelling partially furnished (i.e. you provide certain furniture)
- Liability coverage
- Loss of Rents coverage
Then, if you live in an area subject to flooding, you may need a Flood Policy through NFIP. And if you live in an area prone to earthquakes, you should consider adding an earthquake endorsement to your policy through your State Farm Agent.
What should we look for in the tenant’s policy?
It is up to the tenant to select his or her coverage and carrier. But in general, you will want to confirm they have a tenant’s policy that at a minimum includes liability coverage. Other important coverage includes personal property coverage and additional living expenses (loss of use).
I’d like to understand what is covered for pets. My policy won’t cover damage from my tenant’s pet, but I can collect from their policy if their pet damages my property? Do I understand that right?
Your policy will not cover their pet’s damage. But you may be able to pursue a claim against your tenant’s policy. For example, you may be able to pursue a claim if your tenant’s dog chews on your carpet.
I have properties in two states and have to work with two agents. Any way to work with one?
At this time, for State Farm policies, you will typically need two agents- one in each state.
Who should pay for ADT services in terms of liability?
This would be an agreement between you and your tenant. If there is a home monitoring system, State Farm customers may be eligible for the Home Alert Protection discount.
If you are considering the purchase of a monitoring system, check out our special offers to State Farm customers. One, in particular, is helpful for renters because they can take it with them if they move.
Do renters policies usually include Loss of Use or is this a separate rider?
At State Farm, this is included as standard coverage for our tenant policyholders. You can share this information with your tenants so they learn more: Renters on Statefarm.com
If the tenant’s water overflows and drips down to the below neighbor’s ceiling, who is liable?
In these situations, several policies can come into play as well as the Association CC&Rs:
- Your policy for damage to your property and loss of rents
- Their policy for damage to their condo unit
- Liability coverage if they did something that caused them to be responsible
- Possibly the condo association master policy may apply
How does a policy determine who is responsible for repair damages? For example, what if a bad contractor did poor repairs that failed and needed more repairs?
Determination of responsibility depends on the facts of the situation, like who hired the contractor, the policy contract, and the contract with the contractor.
If a covered loss damages a tenant’s stuff, is that not covered under liability damages?
Liability coverage is dependent on your being legally responsible for the cause of the damage.
If you have any further questions on rental property insurance, please reach out to a State Farm® agent.
Also published on Medium.