Why Landlords Need Rental Property Insurance in Maryland

 In Landlord Insurance

What is rental property insurance?

Rental property insurance is sometimes referred to as landlord insurance. It is a special kind of insurance that protects the property you are renting out as well as the source of income it generates.

Assume a fire renders your property uninhabitable and your tenants must vacate.  Rental property insurance will cover both the rental income and damages to the rental, so you can have peace of mind.

Is Rental Property Insurance a Good Idea?

Many landlords can find themselves in a difficult financial position when it is not possible to rent out their units after a disaster renders them unlivable. Regardless of the situation, you still need to make your mortgage payments on time, and that is where insurance can help.

A trusted insurance agency like Luray Insurance of Baltimore can cover this rental stream. It reduces the landlord’s financial liability as a result of a loss of rental income. Additionally, we provide coverage for the structure as well.

What Does Rental Property Insurance Cover?

In most cases, rental property insurance covers the following:

Structural: Covers damages to the structure of the rental.

Rental income: A portion of your rental income will be covered if your tenants are forced to vacate due to a natural disaster, fire, or more. The insurance will cover the lost income until you can repair the damage to the property (usually up to 1 year).

Liability: Covers injuries at the property for any persons residing in or visiting your rental.

The landlord can also request additional coverage for:

Vandalism & Theft: For landlords renting out furnished properties, it is important to ensure this section is included in the policy to protect your furniture, copper pipes, etc.

What Does Rental Property Insurance NOT Cover?

The following are generally not covered by rental property insurance:

  • General wear and tear.
  • Pest-related damages.
  • Damage due to earthquakes and landslides, but some carriers offer a buyback.
  • Flood, can be purchased separately.

Rental Property Insurance vs. Home Insurance

It is traditional for homeowners insurance to cover property and belongings. As well as the coverage described in a previous section, rental insurance covers the landlord’s property and the income it creates, but not the tenants’ personal property that was contained inside it.

Do I Really Need Rental Property Insurance?

Yes. If you choose not to protect your asset with rental property insurance, you are exposing yourself to increased liability and the risk of lost rental income. You could also run the risk of being liable for personal injury if a tenant or guest gets injured on the property.

 

If you are planning to rent out a property, you need to prepare for the unexpected. Call Luray Insurance of Baltimore at 416-602-2636 to get a tailor-made policy that will properly protect you, your property, and your assets. Make sure to visit our website to explore our products, and request a quote.

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