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Jay Thomas

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eXp Realty LLC
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Landlord Insurance is something you may need to think about!

January 18th, 2022



If you think a homeowners insurance policy will cover you when you turn your current home into a rental property or buy an investment property, think again.

Rental properties require their own type of coverage--landlord insurance, which is different than the homeowners policy you buy when you live in a house yourself. Landlord insurance protects you against losses from fire, lighting, falling trees, wind and hail, water damage, and injury to your tenants and their guests.

But it doesnt cover the renters household goods. So encourage tenants to buy a renters policy to cover their stuff. You can even include a clause in your lease saying they have to buy renters insurance, so everyone is clear about whats insured and whats not.

Landlord Insurance Is Expensive

Youll pay 15% to 20% more for a landlord insurance policy than you will for a homeowners policy on the same  — house and even more if you offer short-term rentals. Start your policy shopping by calling the company that sold you your homeowners insurance, then check with an independent insurance agent selling commercial and business policies.

Ask how you can get discounts if you have fire prevention devices, burglar alarms, or multiple properties.

What a landlord insurance policy probably will cover:

What a landlord insurance policy probably wont cover:

Optional coverage you might want to buy:

Dont Forget Liability Coverage

To cover yourself in case you lose a big court case filed by an injured tenant, buy an umbrella insurance policy that gives you liability protection for 1 million to 5 million or more if you have a lot of assets to protect.

Dont File a Claim Unless You Absolutely Have to

Theres a limit to how many claims you can file before insurance companies start charging you more or canceling your policies. Claims can quickly add up as you buy more rental properties.

One time you always want to file a claim is when someone says theyve been injured on your property. One claim youll want to avoid filing: water damage for less than 10,000 because worries about mold growing in water-damaged properties will lead some insurers to immediately cancel your insurance policy.


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Disclaimer : The views and opinions expressed in this blog are those of the author and do not necessarily reflect the official policy or position of the Houston Association of REALTORS®

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