A Step By Step Guide to Choosing Landlord Insurance
What is Landlord Insurance?When you decide to rent a property or multiple properties, you are inheriting unique risks that a typical homeowner doesn’t have to worry about. The standard homeowner’s insurance package doesn’t protect you against tenant property damages or tenant liability — both of which are a necessity for landlords looking to gain adequate insurance protection to cover any significant costs. Landlord insurance policies are custom-tailored, and may include:
- Personal or commercial property damages
- Medical liability claims for tenants or commercial properties
- Fire damage
- Protection against specific perils
- and many more unique coverage options
Who Needs Landlord Insurance?While the primary goal of landlord insurance is to protect against financial damages attributed to your properties, many landlords fail to understand the full scope of landlord insurance. Not only does landlord insurance protect property, but it can protect against medical claims that happen on the property. For example, if you rent out commercial property and someone slips and falls on the premise, landlord insurance with medical coverage may help protect you from damages. Depending upon the package, landlord insurance may also have general liability coverage to protect against lawsuits — including defense coverage for claims brought against them. Landlord insurance may also cover more than the building property and tenant liability. Inland Marine insurance can protect property in transit as well — including expensive commercial equipment.
Step By Step Guide to Choosing the Right Landlord Insurance PackageHere are some steps that will help you choose the right landlord insurance for your specific property needs.
Step 1: Determine Your Property TypeLandlord insurance packages can cover the following types of properties:
- Non-owner occupied residential homes with 1 – 4 tenants
- Apartment buildings
- Multi-unit complexes
- Commercial properties
- Mixed-use properties
Step 2: Understanding the Three Basic Types of Landlord InsuranceThere are three primary types of landlord insurance:
- Dwelling Fire Insurance Policy
- Business Owners Policy (BOP)
- Commercial Packages Policy (CPP)
Dwelling Fire Insurance PolicyDespite the name, Dwelling Fire Insurance Policies cover more than simply fire damage. Like many landlord insurance options, Dwelling Fire Insurance is “a la carte” and capable of covering a wide variety of damage types, including:
- Explosions (Internal & External)
- Civil commotion
- Falling objects
- Electrical damage
Business Owners Policy (BOP)This type of insurance is for landlords that have multiple locations or those that have many units per building. The easiest way to think about a BOP is that it combines property insurance with general liability insurance. In other words, this type of insurance typically protects both your property and your business from medical claims. Again, there are many ways to customize your BOP insurance. Your business’s unique needs will play a role in the final package you construct with your insurer.
Commercial Packages Policy (CPP)The Commercial Packages Policy is best used for buildings with over 150 units. Like other landlord insurance packages, CPP is highly customizable and may name specific perils on the policy. These insurance packages may also be bundled with broader coverage items such as Hired and Non-owned Auto Liability, Business Income and Extra Expense, or even Equipment Breakdown Insurance.
Step 3: Think About Your Specific NeedsOnce you know your property type and basic insurance type, you need to think about what unique coverage options you may require. These may include:
- Employee Dishonesty Coverage: This policy protects you against monetary damage from fraudulent employee activities.
- Inland Marine Insurance: This policy protects property in transit as well as specialized on-site property.
- Medical Payments: Protects against medical bills resulting from an accident occurring on the insured’s covered property that resulted from the insured’s operations.
- Hired and Non-owned Auto Liability: This policy protects company vehicles (and employee vehicles) from damages resulting from business needs. For example, if an employee receives vehicle damage while grabbing coffee for work, their damage may be covered.
- Commercial Umbrella: This policy protects landlords above and beyond the limits of primary and underlying liability policies. Limits start at $1,000,000 and can go as high as $100,000,000.
- Equipment Breakdown – Boiler and Machinery Insurance: Despite the name, this protects a wide variety of business equipment — including computers and telephones.
- Law and Ordinance: This policy includes the cost of demolition and debris removal in unique cases, as well as some of the costs associated with complying with the Americans with Disabilities Act.
- Water Back up of Sewer and Drains: This policy protects you against water damage from backed-up sewers and drains.
- Business Income and Extra Expense: This policy protects against loss-of-income during a claim.
- Flood and Earthquake: You may also opt to purchase a separate policy to protect against floods and earthquakes
- Directors/Officers Liability: This policy protects Directors against claims from stockholders, clients, and employees.
Step 4: Contact Your Local Landlord Insurance AgentOnce you have a general idea of the type of landlord insurance you need, it’s time to reach out to your independent insurance agent for a quote. When you talk to them, be sure to include the type of insurance you need and some of the optional policies that may help protect you, your property, your business, and your tenants/employees. Independent insurance agents will shop around for the best possible insurance for your specific property needs. Are you a landlord or business owner in Massachusetts? Contact us to learn about our incredibly diverse range of landlord insurance options. Or request a quote to learn how we can help keep you protected.
See How Much You Can Save!
To learn more about how you can save on business insurance. Get in touch with the independent agents at LoPriore today. Our experienced insurance agents are available 24/7 to answer your questions, provide information about our commercial insurance policies.