What you need to know about landlord insurance
If you own buildings that are rented to others for days, weeks, or long term leases- there are specific insurance policies for landlords designed to protect you and your investment property. The coverage needs will vary depending on the use of the building. You might have a home rental, airbnb, vrbo, seasonal, or a commercial property. You might own it personally- or it could be in the name of a trust or an LLC owned by a group of partners or investors. All of these situations will require some type of landlord insurance policy that protects the property and there are liability exposures that exist because the building is used by someone other than the owner.
If you own buildings that are rented to others for days, weeks, or long term leases- there are specific insurance policies for landlords designed to protect you and your investment property. The coverage needs will vary depending on the use of the building. You might have a home rental, airbnb, vrbo, seasonal, or a commercial property. You might own it personally- or it could be in the name of a trust or an LLC owned by a group of partners or investors. All of these situations will require some type of landlord insurance policy that protects the property and there are liability exposures that exist because the building is used by someone other than the owner.
The value of the home and the coverage for the dwelling is generally the same, but contents, loss of use, and liability are all different. The policy language can also be different.
We’ll leave the legal advice to the lawyers, but from an insurance perspective, the most important thing is to make sure the policy names and protects the individuals and/or entities that are connected to the property. Residential rentals are often owned by an individual or a closely held trust or LLC. In addition to protecting the rental property, it’s very important to shield yourself from the liability associated with having tenants.
If you have multiple properties, they can usually be combined and insured on the same policy for significant savings- especially if insured by the same agent or company that insures your personal insurance policies. There may be some nuanced considerations if there are multiple owners of an LLC and different properties have different ownership groups. This is definitely an area where you’ll want a good independent agent to advise you.
The considerations for owning strip malls or office buildings are conceptually the same as owning residential rental properties, but on a different scale and with different considerations for tenant liability. The pricing will be different depending on the type of tenants in the building. To use an extreme example, having a fireworks manufacturer as a tenant will produce a different set of risks and premium than having a clothing store for a tenant. The commercial policy will account for the various types of tenants in the building and protect you from liability that may arise because of their activity in your building. Of course, you’ll need to make sure each tenant has their own insurance and that you are additional insured as a Lessor of the property, but you’ll still want your own policy as the last line of defense.
Your personal umbrella may be able to extend liability protection, or you may need a separate liability umbrella for the rentals. This will depend on how the policies are arranged. If you own investment properties, you will likely benefit significantly from a relationship with a good independent agent that can guide you properly and help you avoid gaps and shortfalls in coverage between your business and personal policies.
Some companies like AirBnB or VRBO might offer some contractual protection when the home is rented through their app or service- but at the end of the day, your own insurance policy will be the best source of protection to avoid gaps in coverage. Because of the popularity of these apps and businesses, there are a number of insurers that offer policies and endorsements to compliment the coverage extended by the rental platform.
