With rents and housing prices on the rise you may have realized that your spare room or back house is going to be a great source of additional income. Or perhaps you have an investment property with a long-term tenant who is covering your mortgage – or even generating cash flow. No matter where your extra square footage is located, you are going to want a Landlord Policy that protects you. Let’s dig into what makes great and effective landlord policies.
WHEN DO YOU BECOME A LANDLORD?
As soon as someone pays you money to inhabit space that you own, you become a landlord, and along with the extra cashflow you are now enjoying, you are now also burdened with extra responsibilities.
If your extra space is listed on a home sharing website and you are offering short-term stays of under 28 days, your are running a Short Term Rental, and while it’s still important to look into insurance policies for this scenario, things are a little bit different than when you have a tenant staying 28 days or more.
WHAT ARE YOUR RESPONSIBILITIES AS A LANDLORD?
When you rent space in your home, or an entire property, you are obligated to keep the property habitable. This means all the systems in the home should be in good working order – the plumbing, heating, sanitation, electrical systems as well as the structure of the building itself.
WHAT DO YOU NEED LANDLORD INSURANCE FOR?
Landlord insurance is crucial to protect yourself from any costly issues that may come up that are related to your responsibilities to your tenants. If there is a plumbing issue, you do not want to worry about the cost of fixing it, and landlord insurance gives you the peace of mind that things will be fixed or replaced without you needing to outlay the full cost getting this done. Your home is your castle, but it can also be your business and you do not want your business to suffer in the event of unforeseen circumstances. You don’t want to have to sacrifice cash flow or jeopardize mortgage payments by having unexpected costs crop up at inopportune times!
DON’T TENANTS HAVE RESPONSIBILITIES TOO?
You have most likely screened your tenants thoroughly, and are expecting them to take as good care of your home as you yourself would do. This does not always turn out to be the case, and tenants can cause damage – whether intentional or accidental – and may turn a blind eye to maintenance issues that become more problematic (and costly!) over time. Your landlord policy will cover damage to anything that you own, but not to the tenants own belongings – they will need their own separate policy for that.
ARE LANDLORDS RESPONSIBLE FOR PERSONAL INJURY?
As a landlord, you are liable for any accidents that happen on your property as a result of poorly maintained structures or defective systems. This is why it is crucial to keep your property maintained and ensure that issues are fixed as soon as they come up. Your landlord policy will cover you should anyone try to sue you for any injuries sustained as a result of an issue on your property.
WHAT IS THE BEST COVERAGE FOR LANDLORDS?
Whether you have a tenant in the home you live in, or a separate property that is an investment, it’s important to know that you can see to issues swiftly and without incurring large, unexpected costs.
There are many options for landlord coverage, and a Grand Mutual Insurance Agent can explain to you what the base level of coverage would be, and what you will need in order to get the very best protection available on the market.