Owning rental property can be a profitable long-term investment—but it also comes with risks. Whether you own a single-family home or multiple rental units, being a residential landlord means facing potential financial loss from property damage, liability claims, and loss of rental income. That’s where landlord insurance plays a vital role.
Property Damage is More Common Than You Think
According to Allstate, nearly 40% of landlords experience property damage caused by tenants. Common incidents include broken appliances, vandalism, and damage from water leaks or fire. Repairing this damage without proper insurance can cost thousands of dollars and significantly impact your cash flow.
Homeowners Insurance Isn’t Enough
A common mistake many landlords make is relying on a standard homeowners insurance policy. The Insurance Information Institute reports that over 25% of landlords mistakenly assume their existing policy covers tenant-related incidents. In reality, most homeowners policies do not cover rental property damages, tenant-caused liability, or loss of rental income. Only landlord-specific insurance provides the necessary coverage for these scenarios.
Income Protection Matters
When rental property becomes uninhabitable due to a covered event—like a fire or storm—landlords may lose out on rental income. With loss-of-rent coverage, a landlord insurance policy can help reimburse that income. According to the National Association of Realtors, one in five landlords faces a situation where they cannot collect rent due to major repairs. Having this type of protection is essential to maintaining financial stability.
Liability Protection is Key
As a landlord, you are legally responsible for maintaining a safe living environment for your tenants and their guests. If someone is injured on your property, you could be held liable. The National Association of Insurance Commissioners (NAIC) notes that liability claims account for about 30% of landlord insurance claims. A strong policy will cover legal fees, settlements, and medical expenses, protecting both your finances and reputation.
Own Multiple Properties? Bundle and Save
For landlords who own multiple rental properties, bundling insurance policies can lead to significant savings. The Insurance Journal reports that landlords can save up to 20% by insuring all their properties under one umbrella policy. It’s a smart way to streamline coverage and reduce premiums.
As a landlord, protecting your investment is just as important as growing it. The right landlord insurance policy can offer peace of mind and safeguard your rental income.
For more info, text or call Monreal Insurance Solutions at (909) 757-1311.