Five reasons why landlords must get insurance
- Posted By Prince Lakshman
Why should investors also invest in landlord’s insurance? Will you be able to save more if you avail one? It’s a question that has probably boggled every property investor’s mind especially those new to the game.
YES! A landlord’s insurance is a must for all property investors. Not only is it affordable, but it’s also tax-deductible that could help save landlords thousands of dollars eventually.
What does insurance really do for you as an investor?
A landlord’s insurance basically covers many tenant-related risks and circumstances, some of which are specifically explained below.
When tenants’ circumstances change
No matter how much due diligence you do by choosing the best tenant, there is still no assurance that everything will go according to your expectations. In other words, your tenant’s circumstances can change any day, be it financially or how they take care of the property.
This is even truer when you are dealing with short-term rentals or holiday homes for the reason that you don’t usually do a thorough background check on the tenants at the beginning of the rental.
A landlord’s insurance will ensure that you are covered should anything happen whether it’s a long-term or short-term rental.
In the event of natural disasters or accidents
Another thing investors must anticipate are unexpected natural disasters or accidents in the property. Accidents such as breaking or leaking water pipes, and area fires and floods can and do happen. With insurance, you will be able to save yourself from the headaches these things cause.
An insurance gives owners peace of mind with an assurance that they can continue to pay their mortgage while dealing with the stress of such negative occurrences.
If tenants sublet the property
One of the potential problems that landlords encounter is the act of tenants subletting their properties. A sublet is when a tenant has arranged someone who isn’t on the lease agreement to live in the property. The problem with this is that this person might have not met you yet and might not look after the property as carefully as someone who has.
Furthermore, by being not on the lease, they can avoid taking responsibility for any damages within the property. That’s where insurance can have your back.
If your tenant has pets
More and more tenants are having pets in their property. Although it’s a sweet thing to have around for their owners, it’s an issue for landlords. Pets can potentially cause property damage, especially to floors, gardens, and even furnishings.
There are already insurance companies that are including damages caused by pets in properties in their coverage. So this is something you might want to look into.
Any out-of-pocket incidentals
Landlord’s insurance will cover you for any minor incidentals that may arise, such as an unexpected tenant moving out . This will cover for the loss of rent, as well as for any cleaning, repairing, leasing and advertising fees you may be obliged to shell out.
Therefore, getting a landlord’s insurance is a big must for all investors.