Owning rental property can be hugely rewarding, especially in a market like Las Vegas where real estate is still affordable and rents are stable. However, owning rental property also carries a degree of risk, some of which can be managed by purchasing the proper landlord insurance. If you own rental property, here are the landlord insurance basics you should know.
Homeowners Insurance is Not Landlord Insurance
One of the basic requirements of a homeowners policy is owner occupancy. Obviously this is problem for tenant occupied homes. The correct type of insurance for a rental property is called a “dwelling fire” policy. Many insurance companies have product specific names such as “landlord protector” or “rental property protector” but no matter the name, they are all dwelling fire policy forms. Just like a homeowners insurance policy, there are different versions of the dwelling fire policy form: DP1, DP2 and DP3. At Safeguard Insurance, we typically recommend a DP3 policy, which offers the broadest peril coverage.
In addition, we recommend you include the following coverage on your landlord insurance policy:
- Loss of rents. If your tenant is forced to vacate the property due to a covered loss, this coverage will reimburse you for the lost rental income.
- Personal property. Do you provide appliances for the tenant’s use, such as a refrigerator and washer/dryer? If so, consider adding coverage for personal property inside the home.
- Premises liability coverage. Injuries on the property can occur because of your negligence, or the actions of your tenants. Either way, premises liability coverage protects you from bodily injury claims.
- Personal umbrella liability. An umbrella provides an excess layer of liability coverage, typically over your auto, home and any rental properties.
We also recommend that you required your tenants to carry their own renters insurance policy. Doing so provides and extra layer of liability protection for the landlord. It also ensures the tenants have coverage for their personal belongings in the event of fire, burglary or other loss.
Please review our Landlord Best Practices white paper for more information on how to structure a lease and protect yourself from the actions of your tenants.
Get a Landlord Insurance Quote
For a no-obligation quote on your landlord insurance, please call us at 702-638-0022 or visit our rental property insurance page. Safeguard Insurance is licensed to write landlord policies in Nevada, Utah, Arizona and California.