What You Need To Know About Landlord Insurance

Are you a landlord in Brooklyn? Do you vet your tenets and install the best locks on your rental properties? It might surprise you to know that that’s not enough. And if you truly want to protect your property from anything that comes your way, you need to invest in insurance for landlords.

Why?

Property in Brooklyn is downright expensive! You’ve seen the listings — there’s practically nothing for under million dollars. Unless you want to invest in a little better than a hole in the wall.

Building owners like you are usually in possession of a large piece of property. Whether it’s a multi-family or multi-use building, you’re talking about high-ticket properties worth millions of dollars.

The one thing to keep in mind — if you had to rebuild, it doesn’t matter what you bought the property for a decade ago. You’re paying for the cost to rebuild.

What Is Landlord Insurance?

Landlord insurance is a type of insurance that helps protect landlords from damages to their property or from liability claims. This insurance can help cover the cost of repairs, legal fees, and more. There are different types of landlord insurance, and each one offers different coverage.

Is Landlord Insurance Worth It?

Property owners too often make the mistake of thinking standard insurance will cover their tenants. It doesn’t. And when the inevitable happens, they’re left with a dizzying headache and the stress of uncovered claims.

So, is landlord insurance worth it?

Landlord insurance is always worth it! The question you should be asking is, is the property worth it knowing what the insurance could cost?

In most cases, it won’t be an issue. Average landlord insurance is only a few hundred dollars a month, anyways. But some properties need high limits for insurance or specialized insurance based on their location.

You should always be thinking about insurance as a factor in your purchasing process.

What Kind of Landlord Insurance Do I Need?

There are three main types of landlord insurance coverage. Property insurance, liability insurance, and loss of income insurance.

  1. Property insurance can help protect landlords from damages to their property, such as fires, windstorms, or vandalism. This type of insurance can help cover the cost of repairs or replacements.
  2. Liability insurance can help protect landlords from liability claims made by tenants or others for injuries that occur on the property. No matter how long you’ve been renting out your building, liability claims are the stuff of nightmares. This type of insurance can help cover the cost of medical bills, legal fees, and can help you sleep at night.
  3. Loss of income insurance can help protect landlords from loss of rental income if the property is damaged by a covered claim and cannot be rented until the repairs are done. This can happen for a variety of reasons, including smoke damage or water damage.

What Types of Insurance is Make Up Landlord Insurance?

This is the type of policy where you should really sit down with a local expert and walk through your exposures. They can thread the needle by customizing a policy — limiting your exposures and finding cost savings.

Why? Because owning property and being a landlord has its own unique risk management exposures. But, in general, the types of insurance you need to keep you covered will typically fall into these three categories:

  1. Property Insurance

You’re not seeing double. We mentioned some of the benefits of this insurance above. But you need to understand that if you’re renting your home temporarily, or even running an Air BnB out of a second home or apartment, your homeowner’s insurance will not cover claims related to these tenants.

  1. Liability Insurance

Are most of your properties still in your own name rather than rolled into an LLC? Then understand that your assets are still firmly tied to each of the buildings you own. It only takes one mishap and you could lose everything you’ve spent years building.

  1. Umbrella Insurance

If you haven’t been paying attention to lawsuits of late, you may find yourself critically underinsured. Litigation in New York is heating up. Now, umbrella coverage is more necessary than ever.

Want a more detailed look at what types of insurance will best serve you as a landlord? Speak to one of our experienced insurance agents to help you choose the right coverage for your needs.

Frequent Landlord Insurance Claims

A couple of common landlord insurance claims include water damage and fire damage. Water damage — one of the most common claims — can easily be caused by a number of things, such as leaking pipes. Fire damage is costly and often caused by simple cooking accidents or electrical fires.

Here is a short list of other common claims:

  • Loss of rent as a result of a covered claim (fire, water, etc)
  • General liability — someone gets hurt on the property

What Landlord Insurance Doesn’t Cover

While landlord insurance can help protect you from many costly damages, it’s also important to know what it does not cover, such as:

  • Intentional damage to the property. If someone were to get upset and intentionally break something — that’s what the security deposit is for.
  • Damages caused by animals. If a tenant has a dog that really doesn’t want to be inside, they chew a hole in your door.
  • Normal wear and tear of the property. Nothing lasts forever, and properties need occasional maintenance due to age.
  • Floods. There are areas in Brooklyn that have flood exposures. These will need a special policy. Sometimes those policies need to come from FEMA.

Be sure to speak with a qualified insurance expert so they can walk you through the coverages and exceptions, guiding you to the perfect policy for your unique needs.

How to Find the Best Landlord Insurance Policy

Landlord insurance policies can protect landlords from property damage, rental income loss, and liability. The best way to purchase landlord insurance is through an insurance broker, like Lincoln Brokerage.

Why us?

Because instead of a “one size fits all” approach, we offer personalized policies. How? Our brokers have access to multiple insurance companies, allowing them to compare quotes and options from multiple carriers. They will work with you to identify your unique needs so you don’t end up paying for things that don’t apply to you and your situation.

Ready to get started or looking for more personalized answers to your questions? Reach out to one of our independent brokers today!

Here are some addtional articles we think you might like:

Does Landlord Insurance Cover Water Damage?

Tenants flooding your voicemail with reports of busted pipes & soggy carpets, leaving you to wonder, "does my insurance cover water damage?” Here’s your answer:

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