Do I Need Landlord Liability Insurance?

Jan 24, 2021 | Personal Insurance

If you want to venture into a business that involves being a landlord, you want to ensure that you are beginning on the right path and are doing the right thing. You might want to be also aware of your rental properties you’re liable for. Being a landlord is a tough role and you need to take this seriously no matter what the case is.

Do It Right!

If you take shortcuts and skip essential procedures in running such a business, this can result in your monetary distress and your biggest dream of being a real estate tycoon can vanish. Landlord Liability Insurance is very important since it can maintain your property renting business at its highest spot. Let’s further talk about this in this written article. After you have read the full article, please don’t hesitate to ask us for more questions and clarifications.

Having rental businesses can be both rewarding and financially profitable. However, just like any other business, they come with some risks, especially to your property. One good way to safeguard you and your property is to acquire landlord liability insurance in Denver, Colorado or any other state in the US. The landlord liability insurance can run along with a traditional or basic homeowner’s policy as long as it allows rental. However, landlord insurance comes with additional protections that can help you for a long time.

What is Landlord Liability Insurance?

Landlord liability insurance is basically a way to safeguard you in terms of money in case a tenant or guest tries to sue you for damages. Damages can range from financial strain, emotional stress to physical injury. This can also include, of course, death.

Liability coverage is a basic offering in most landlord insurance policies. It can help pay for the costs if you’re found legally responsible if someone is found injured in your property or if you have to pay for damage you have caused to someone else’s property.

Landlord liability insurance is often called simply liability coverage. This is an insurance plan specially made for rental property owners. As the name states, landlord liability insurance is not to protect primary residences but this is specifically made to be leased out by the homeowners. Landlord liability insurance is your protection against any financial harm that may occur in case a visitor or resident plans to sue you for any damages which can come in different forms. These damages are financial problems, emotional offense, physical injury, and even death.

Landlord liability insurance usually protects against all the things that traditional homeowner’s insurance policy protects against the following:

  • Tenant damage or tenant guest damage
  • Uninhabitability
  • Tenant injury or tenant guest injury

Tenant Damage

Tenant damage or tenant guest damage refers to any kind of damage that your tenant or guests make to your property while they are renting out your place. When your tenant is irresponsible in not maintaining your property clean and well-managed, landlord insurance can protect the owner and you may not pay any expenses from your pocket to make repairs.

Uninhabitability

Uninhabitability closely follows tenant damage or tenant guest damage. However, this goes further than that since this is to protect the landlord against damage that makes their property uninhabitable. Of course, you can’t rent out your apartment or house during repairs and inspections so this will result in a significant loss of profit. Landlord insurance will sometimes cover the expense up until twelve months.

Tenant Injury

Tenant injury and tenant guest injury offers protection against medical and legal bills that you may have to pay from the injuries that your tenant or guest obtains while in your rental property. As the landlord, you will be responsible for the harm that your guests may obtain while renting out your property. The tenant must prove that you were negligent in maintaining your property or you have failed to act to cause an injury. However, in some states like New York, they have low standards in deciding landlord liability. Landlord liability insurance will cover the medical expenses of tenants and their guests and the legal fees are also included.

Do I need Landlord Liability Insurance?

It is a fact that your homeowners’ insurance policy won’t cover the place you rent out. Landlord insurance normally only provides insurance for the structure of the home and also includes liability coverage that can help you prevent from paying from your own pocket if you are found at fault in certain problems. You may also find your lender requires you to have landlord insurance in case you have a mortgage on the home you’re renting to your tenants.

What is covered by Landlord Liability Insurance?

Landlord liability insurance is here to, of course, protect you. We can prepare this insurance policy for you to rescue you should you have any legal expenses and costly medical fees. There can be so many legal claims such as falls and slips, theft, property damage, and many others. If you have any of these legal claims, the insurance coverage will pay for all the expenses that come with your legal defense even if you are guilty or not.

It’s actually difficult to maintain a rental business since this goes beyond giving your tenants the key to their rental unit. You also need to do some maintenance and also safety measures on the rental property. Aside from these, you also have to place reliable security systems all over the property. However, of course, we can’t avoid some incidents that can still happen to your tenants and rental properties even though you have taken these important measures.

Here is some example of situations that you should be aware of:

  • A tenant accidentally falls on a cheaply made sidewalk
  • Staircase railing gives up leading to a tenant to fall at the ground floor on their back
  • A thief manages to sneak inside the apartment or house since the locks installed were all cheap and poorly maintained
  • Black mold is appearing all over the property and residents are suffering from serious medical conditions
  • A resident is forced to leave his / her unit without due process
  • A resident wasn’t allowed to rent and sues you on the grounds of discrimination
  • A tenant is denied to rent the apartment or house suing on the grounds of discrimination

You need to get the right insurance coverage since liability situations can come in different forms. They can also be unforeseen. Landlord Liability insurance will safeguard you from whatever claim your guest or tenant will throw at your way with the help of their renter insurance. One great tip is to ensure that you upgrade your coverage by improving your landlord liability policy by getting an umbrella policy. You can also ask us about covered loss and other homeowner’s protection clauses.

One concern for landlords is tenant injuries. One instance is when a loose handrail causes your tenant to fall. You could be held liable for the injuries caused by the fall if you were found negligent in maintaining the property or even if you just failed to warn your tenant of a possible risk. This is according to the Insurance Journal.

This is where your landlord liability coverage comes in. The insurance coverage can help you pay for legal defense and help you cover court judgments that were placed against you until the limits written in your own policy.

Some more other situations can also expose you to liability according to the Insurance Journal:

You could be held responsible if you weren’t able to provide proper and enough security for your tenants in case one of your tenants is involved in unlawful behavior and if you weren’t able to stop it. Landlord liability coverage can safeguard you in case of these incidents and other similar scenarios up to the limit that is stated in your own policy. Having your own landlord insurance policy with liability coverage can give peace of mind. Your mind is going to be at ease knowing that you have a safety net in place in case there’s going to be an incident.

Landlord insurance is a policy for people who rent out the places they own. This kind of insurance usually includes two different kinds of coverage. These are property and liability protection. Both coverages are here in order to safeguard you, the landlord, from all the financial losses that may occur.

Renter’s Insurance vs Liability Insurance

As a landlord, of course, you might also want your tenants to also invest in a renter’s insurance as an emergency in the lease agreement. However, event if this is not really required, this is, of course, a smart move for anyone who is renting. Landlord Liability Insurance will assure that if anything bad happens, it will instantly be looked upon and addressed. However, what are the responsibilities of the landlord and tenants? This factor is actually complicated. 

Here are some examples of situations that a landlord or renter can be liable for:

  • Dog bite

If there is a chance a guest happens to be bitten by a dog, the person can sue the landlord undergrounds of medical damages, emotional torment, and many others. However, if according to the documents of the lease agreement that no dogs more than 10 pounds are allowed, and for example, it was a huge Great Dane that bit the guest, the responsibility will be carried by the tenant.

  • Fight

If there is a chance that a tenant is attacked by someone who lives in the building, the fault would not fall on the person who assaulted the tenant. Please take note of this, landlords. If the locks to the main door of the unit you’re renting out are of low-quality, the fault would be directed to you, the landlord.

Landlord Insurance: Is it legally required?

In case you have a loan, maybe. However, if you don’t carry a loan, then it’s not mandatory. Please take note that there is no law that requires property owners to get this kind of insurance policy. However, having insurance gives you benefits.

Why should you invest in insurance for landlords?

In all honesty, we greatly suggest purchasing landlord liability insurance since anyone can sue anybody for many reasons. Once the jury thinks that you could have done your job better to protect your guests, you can face serious financial distress and emotional stress too. Of course, even though the claim is in your favor, defending yourself in court will cost so much. Having this business, being a landlord will expose you to many and different kinds of risks so you should be wise enough to safeguard yourself against it.

Since anybody can sue anyone for anything at this time, you need protection. If a jury states you could have done more to safeguard your guests or tenants, you could face financial stress. Even though the claim rules in your favor, being present in court can cost you thousands of dollars and might be more than your yearly premiums. The bottom line is there’s too much risk in place so protecting yourself against these risks should come first.

Cost of Landlord Insurance

The cost of landlord liability insurance depends on many elements including the following:

  • The location of the building
  • The construction
  • The amenities and facilities
  • The kind of business operation
  • And many more

It is essential to sit down and talk with us about your situation just like in most cases. This could help us with your property and we could help you make an insurance policy that is perfectly designed to fit your needs.

Landlord Property Protection

The property protection in a landlord insurance policy usually helps cover physical property that is related to the home you’re renting. This may include the dwelling itself and equipment included to help maintain it. The coverage for this includes the following:

Dwelling

This coverage will help you pay in order to repair your rented home, condo, or apartment in case they got damaged by fire, lightning, wind, hail, or other covered losses.

Other structures

This helps you pay in order to repair detached structures on your rental property such as a detached garage or fence in case they are damaged by a covered loss.

Personal property used to service the rental

Landlord property protection may also help you cover equipment like lawnmowers or snow blowers if they are damaged. However, some things won’t be covered under your landlord’s policy such as your personal bike or DVD player if you leave them.

These kinds of coverages are always subject to the deductibles and limits found in your specific landlord policy. The deductible is the price you’ll pay for a covered loss before your landlord insurance enters. A limit in your insurance policy is the maximum amount your policy will pay after a covered loss. Each kind of coverage usually has its own separate deductible and limit. You may also set your own deductible and limit values for these coverages.

Landlord Liability Protection

If a person is injured on your rental property and you’re found responsible for it, the liability portion of a landlord insurance policy may help pay for the person’s medical bills and even your legal expenses. For instance, if your tenant falls down the stairs at your rental property and the court decides that you failed to maintain the stairs and/or railing, you could be held responsible for the tenant’s medical, legal and other expenses. If that was the case, your landlord liability coverage may help you pay for those expenses up to the limit of your own insurance policy. Usually, you won’t have to pay a deductible for a liability claim.

Additional Landlord Coverages to take note of:

You may want to consider getting some optional coverages to your landlord policy depending on your neighborhood, geographic area, or the condition of your rental place. These coverages may include the following:

Vandalism

You may want to consider getting optional coverage to help you pay to repair vandalism damage in your property. In case your property got vandalized, this kind of damage is not really covered by a traditional landlord policy unless you also buy vandalism coverage.

Burglary

A basic landlord insurance policy may, of course, help pay to repair your home in case it’s damaged due to a break-in. However, it usually won’t pay to replace the stolen items in case a burglar visits the place. Optional coverage may be available for theft of items you have in your property to help maintain it like your appliances or lawnmower perhaps.

Rental property under construction

You may also purchase additional coverage to help protect the structure until your place to rent is ready to be occupied. You can use this in case you are renovating your rental place or building a new dwelling.

Building code

According to the International Risk Management, you could be legally required to upgrade the wiring or ventilation if you’re repairing or replacing part of your rental after it’s been damaged. This is needed since your city or county codes may have changed ever since your property was originally made. This kind of coverage may help you reimburse for those extra costs.

We greatly suggest talking with us directly in order to learn more about these optional coverages. We can help you understand how they may help protect you as a landlord.

What’s usually not covered by the Landlord Insurance?

Landlord insurance can help you pay for expenses rooting from sudden and accidental losses. You’ll, of course, may find some things that are excluded from the insurance policy’s coverage. 

A landlord insurance policy may not cover the following:

Maintenance and equipment breakdowns

You’ll likely to pay from your own pocket any necessary repairs or replacements in case the heater or dishwasher in your rental property breaks down.

Property you share

According to the National Association of Insurance Commissioners, in case you live on the property and you’re also renting out a room or another floor to a tenant, you’re not usually not eligible for a landlord policy. Landlord policies are offered for “non-owner-occupied” property. Kindly discuss it with us if you can add coverage to your homeowners’ policy for the section of your property you’re renting.

Tenants’ belongings

Kindly take note that landlord insurance does not really cover your tenant’s personal possessions such as electronics, clothes, etc. For this kind of protection, kindly inform your tenants that they need to purchase their own renters’ insurance policy. Some landlords actually require their tenants to show proof of their renters’ insurance before approving their rental contract. This can help them repair or replace their personal belongings like furniture and clothing in case they are damaged by a covered peril such as fire or theft.

Homeowners Insurance Vs. Landlord Insurance for a Rental Property

If there is a chance you want to have your house that you own into a full-time rental property, you most likely need a landlord policy. This kind of insurance can help protect your rented place. However, if you just plan to have tenants only occasionally, then homeowners insurance may be a better choice. Here are some listed factors for you to consider when deciding what kind of insurance is perfect for your situation:

Length of Rental Agreement

According to the Insurance Information Institute, in case you’re planning on temporarily renting out your home for a single occasion, then it’s possible that your existing homeowners’ policy may offer you some protection. One instance is if you want to rent out your place at a time that coincides with a big sporting event in your town. A homeowners insurance policy can help cover damage caused by certain risks like fire or a break-in if you rent out your home occasionally. However, kindly take note that you cannot purchase homeowners insurance if you do not live in the home.

However, if you’re planning on renting out your single-family home or a second home or investment property on an ongoing basis, you have to choose landlord insurance since a homeowners policy won’t usually protect you in this kind of scenario.

Homeowners Insurance Vs. Landlord Insurance

Landlord insurance usually helps cover the building itself and other structures found on your property such as sheds or fences just like a homeowner policy in case there’s damage from a fire, lightning, wind, or another covered loss. In order to acquire homeowners insurance, you must live in the home.

Homeowners’ insurance may give you coverage if you’re living in your single-family home and you’re renting out a room to tenants. This is depending on the number of people renting or the length of their stay in your home. Insurance coverage differs depending on your insurance company or your own insurance policy so we greatly suggest asking us for advice before you rent out a room in your place. If you also plan to rent out your entire home to tenants, you’ll need landlord insurance instead.

Landlord insurance can cost a lot. However, it can help protect you against some risks you may deal with your tenants. In most states, landlords like you don’t have to obtain special insurance for your rental properties. Homeowners insurance usually has the standard insurance coverage that most landlords opt for. However, basic homeowner’s insurance mainly protects the property without protecting your tenants’ actions against you. In a traditional insurance policy, willful acts are not included. Uninhabitability protection is not covered under homeowners insurance too and tenant injuries do not really have the same insurance coverage needed to protect you.

Other key differences between homeowners and landlord insurance policies include:

Personal property coverage

Homeowners’ insurance may help you cover different kinds of belongings like furniture, clothing, and computers. However, landlord insurance usually only offers coverage for items used to service the rented property. So, this coverage won’t protect you if you leave your personal items behind that are not used to service the rental property. It will only cover items such as a snowblower for the lawnmower that you have on-site to help maintain the property.

Liability coverage

Landlord insurance usually only provides liability coverage connected to the rented premises. In case a tenant is found hurt in the home you’re renting out and you are found legally responsible, the liability coverage included in your landlord policy may help pay for the medical expenses or legal fees. The liability portion of a homeowners policy, however, usually covers you and relatives who live with you in your home regardless of whether the accident happens in your home or not.

How Renters Insurance Protects Your Tenants

Both landlord insurance and homeowners insurance do not cover the personal belongings of your tenants. We greatly suggest making renters insurance a condition of your lease. This kind of insurance may help protect your tenants’ possessions and also offer them some liability protection.

Kindly always take note that it’s definitely a good idea to think over the risks of inviting paying guests into your own home. Always read your insurance policy beforehand and ask us any questions and ensure that you have the right coverage in place before you welcome any renters to rent out your place!

Does Landlord Insurance Cover Tenant Damage?

Your landlord insurance policy may help you in case a tenant damages your property. Landlord insurance usually includes dwelling coverage which can help you protect against sudden and accidental damage to your rental place. According to the Insurance Information Institute, if your property is damaged by a covered peril such as fire, lightning, or hail, landlord insurance may help you cover the repair cost.

In case there is a kitchen fire that damages the apartment, the dwelling coverage included in your landlord insurance policy may help cover this incident. One instance is if a fire damages the walls or cabinets, the dwelling coverage in a landlord insurance policy may help cover the cost of repairs. However, kindly take note that you will have to pay your deductible which is the expense you have to pay toward a covered loss before your insurance benefits enter. It’s also important to take note that your insurance policy will usually only cover losses up to a specific amount so it’s essential to know your coverage limits and adjust them to fit your exact needs.

What is not covered?

Not every situation, of course, will be covered by your landlord insurance policy even though they help protect a number of unexpected losses. One example is maintenance related issues and equipment breakdowns. These are usually not included in your landlord insurance coverage. Your insurance policy may still help you replace your washing machine if it’s damaged by fire or it breaks down due to wear and tear. However, landlord insurance won’t cover the cost of buying a new one.

In addition, landlord insurance usually won’t cover intentional damage such as vandalism. The dwelling coverage may cover the repair expenses if a tenant accidentally damages the unit while moving some furniture in your rented apartment or house. However, the expenses of the cleanup if you encounter a discontented tenant spray-painted the walls may not be really covered.

Renters’ Responsibilities

Renters are still, of course, responsible for safeguarding themselves and their personal property even though landlord insurance coverage may help protect the home you rent out in specific incidents. For instance, they need renters’ insurance for their personal belongings since the landlord’s insurance policy will not cover those. While landlord insurance may help you cover the expenses of repairs to a home’s drywall or floor after the water found in the bathtub overflows, it won’t usually help to replace the renter’s water-logged belongings.

It’s essential to understand what your landlord insurance policy does and does not cover whether you’re looking to rent out your vacation home or you already have a rental property. If you have further questions, we can help you out.

Ask Us Questions For Clarifications

We hope that you have learned a lot about landlord liability and getting the right insurance to protect you, your property, your business, and your tenants. In case some things are still unclear to you, please do not hesitate to call our client toll-free hotline at (877) 658-2472 or our new client inquiries hotlines at (855) 973-1202 or (855) 712-6584. Our agents are available to answer your call during business hours. You can find more information about insurance on our website so please visit and read our blog. We’d love to hear from you! Have a great day!