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How to get landlord insurance

October 16, 2020

When making the decision to turn a property into a rental property, one of the first steps is to talk to an insurance company about the type of property coverage you'll need. Many property owners make the mistake of assuming that renters insurance, their homeowners liability coverage, or some combination of the two will cover them, however that can lead to financial loss down the road. While we do recommend requiring your tenants have renters insurance to protect their personal property, and by extension, you, we also recommend property owners have their own landlord insurance policy. Purchasing a landlord insurance policy will help make sure that you're protected in the event of property damage, as well as for liability protection against legal fees in the event that a tenant sues.

Step 1: Determine What Type of Insurance You Can Get

The type of insurance you are eligible for will basically depend on whether you're renting out a room in property you occupy or if you're renting out a property that you do not occupy. Generally, when renting out one to two rooms in your own home, you will still be able to use your homeowners insurance policy to cover any issues that may arise as a landlord. You will need to discuss with your current insurer to make sure you have the proper amount of homeowners insurance coverage. If you are renting out a property that you do not occupy, or renting out a property to 3+ tenants in a property you do occupy, you will generally be ineligible for homeowners insurance and need to look into purchasing a landlord insurance policy.

You may also want to review what types of coverage you're looking for at this stage. For example, if you're currently building your rental property, you'll want to consider landlord insurance options where add building code coverage as one of the coverage options.

Step 2: Discover Who Your Landlord Insurance Local Agent Options Are

Unless you purchase a policy online through Steadily, you'll need to go to an insurance agent who will be able to find an insurance carrier that suits your needs. You can find who your local insurance agents are through google, trustedchoice.com, and even Yelp. We recommend deciding on a few different agents and talking to all of them in order to find the best landlord coverage for your rental property

Step 3: Discuss your Property and Coverage Needs

You'll need to have some basic property information prepared when you sign up for landlord insurance.  This will include basics such as the address, age, and the materials the home is made out of to determine the replacement cost of the property. Then, you'll be able to opt into additional coverage such as vandalism coverage, which will cover damage in the event that somebody intentionally damages the property.

Step 4: Wait

After talking on the phone with an agent, you'll need to wait for them to contact insurance carriers to generate your insurance quote. This process generally takes 5-10 days. Once they have your quote, they'll call or email it to you and you'll be able to see the amount of liability coverage you'll be able to receive, what your deductible is, and what is considered a covered loss.

Step 5: Review and Purchase a Policy

Once your agents get back to you with your quote options, you'll want to review which one works the best for your needs. For each type of policy, you'll want to read what is included in the coverage (also referred to as named perils), and more importantly, what the exclusions are so that you aren't caught unawares later on. Afterwards, you'll just need to sign a contract and you're good to go!

Conclusion

While the process may seem long, it's important to make sure your landlord insurance covers whatever you may need for your property in order to protect your rental income. Without this type of insurance, if the property suffers from significant damage, you may not only be out for the replacement cost for the building, but you will also suffer a loss of rental income during the time that the building is uninhabitable. With landlord insurance, you will be better protected for when something goes wrong as a property owner.


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