Rental Property Damage & Insurance Coverage
Whether you own a single-family rental home or a large apartment complex, property insurance is crucial to protect your rental property from many types of perils. An experienced agent will analyze your rental operation and recommend a policy for you.
What Property Insurance Covers
Most property insurance covers damages or losses from fire, storms, and burglary. Be sure to check out whether your policy will cover “loss of rents” as a result of one of these perils (such as a fire in your building which makes a unit uninhabitable).
Property insurance should also reimburse your losses from vandalism (whether by a disgruntled tenant who punches holes in an apartment wall or a local teenager who paints graffiti on the side of your building). Always report vandalism to your local police department (your insurance company may require a police report before reimbursing you for vandalism-caused damage).
Property insurance does not cover all losses (mudslides, for example, may be excluded), so be sure you know what is and is not covered and the dollar limits of your policy.
Earthquake, Flood, and Other Insurance
Depending on where your property is located, you may want to purchase additional protection for special perils such as earthquakes and floods (these are not typically included in property insurance policies).
A comprehensive policy will also include liability insurance, covering injuries or losses suffered by tenants and others as a result of a defective condition on your rental property. For example, if your tenant breaks a leg as a result of falling down your broken front steps, liability insurance will cover the tenant’s medical bills. Liability insurance will also cover lawyers’ bills for defending personal injury lawsuits against you. The most comprehensive type of liability insurance covers libel, discrimination, unlawful or retaliatory eviction, and invasion of privacy (with some exclusions, such as intentional acts or violations of criminal statutes).
Many landlords (particularly in high-end rentals) require tenants to buy renters’ insurance. This covers the tenant from losses or damage to their belongings due to theft or fire. Renters’ insurance also covers as injury to other people or property damage caused by the tenant’s negligence.