My tenant damaged my rental home. Does Landlord insurance cover the damages?
Key Takeaways for Landlord Insurance:
- Landlord insurance covers certain types of accidental damage caused by tenants, but not normal wear and tear.
- If a tenant damages your property, their renters insurance should cover the cost.
- Most landlords require tenants to pay a security deposit and have renters insurance to protect their assets from damage.
- It is essential for landlords to have a landlord insurance policy, but it is important to understand what types of damage it covers.
Landlord insurance: What it covers
A landlord insurance policy is designed to protect your rental property from damages caused by tenants or rental-related incidents. It typically covers the following:
- The structure of your property (dwelling) from unexpected and accidental damages caused by a covered loss.
- Personal belongings inside the property, such as furniture or appliances, but not tenant's personal property.
- Legal expenses in case of a lawsuit (personal liability)
- Loss of rental income. It is important to speak with your insurance agent to understand the limits and coverage of your policy. As a landlord, you have a significant responsibility for your rental property and should also familiarize yourself with state-specific landlord-tenant laws.
Landlord insurance: What it doesn't cover
Landlord insurance does not provide protection for all types of damages. Here are some examples of what is not covered:
- Tenant's personal belongings, but landlords can require tenants to have renters insurance.
- Damage caused by normal wear and tear, regular maintenance, or breakdown of appliances and devices.
- Intentional damage, such as vandalism. However, additional coverage can be purchased through optional riders.
- Some natural disasters, such as floods and earthquakes, which require separate policies.
- Water damage caused by flooding or negligence. When considering landlord insurance, it is important to understand the coverage limits and exclusions. It may not cover the full value of your property, which is where a personal umbrella policy can provide additional protection.
Does it cover tenant damage?
Landlord insurance typically covers damage to the structure of your rental property caused by tenants, such as accidental fires. However, it may not cover wear and tear, theft, or other types of damage caused by tenants. The coverage and exclusions vary by insurance provider.
If you are eligible for reimbursement, the amount will be based on your policy limits and you will have to pay your deductible. To protect yourself further, you can also require tenants to pay a security deposit.
A landlord insurance policy can offer protection against many rental-related losses, but it is not a comprehensive coverage. It is important to understand the limits of your policy and to consider additional coverage options. It is also a good idea to require tenants to purchase renters insurance. This way, you can have peace of mind and get the most out of your rental property. Talk to a Luna agent, they specialize in homeowner's and landlord insurance.
