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Landlord insurance protects investment properties against unforeseen risks such as damage or loss. Several key factors influence the premium calculations for landlord insurance, and knowing and analyzing them will help landlords anticipate insurance expenses and manage their financial commitments wisely.

Premium Calculation

Landlord insurance premiums are calculated based on several factors:

• Property assessment: Insurers inspect the structure to determine rebuilding costs in case of severe damage or fire.
• Coverage amount: The level of protection you choose affects the premium with more coverage resulting in higher costs.
• Property location: Areas prone to natural disasters or high crime rates typically have higher premiums.
• Property value: More expensive properties generally command higher premiums.
• Deductible: Higher deductibles often lead to lower monthly premiums but increase out-of-pocket costs for claims.
• Tenant type: Renting to students or short-term renters may be viewed as riskier, potentially increasing costs.
• Property features: Factors like the age and condition of the home, roof, appliances, and HVAC system influence premiums.
• Claims history: Landlords with a history of filing many claims may be considered high-risk and face higher premiums.
• Rental income: Higher monthly rental income often results in higher premiums to cover potential income loss.
• Number of rental properties owned: Owning multiple properties may increase overall risk and premiums.
• Proximity to fire stations: Properties closer to fire stations may have lower premiums due to faster response times.

Insurers use these factors to assess risk and calculate appropriate premiums for landlord insurance policies.

What are the Main Influencing Factors in Landlord Insurance Costs?

Although insurers consider many aspects, the premium calculations for landlord insurance are primarily influenced by several key factors, including the property's location, the type and age of the building, coverage limits, and deductibles. Additional safety features such as security systems and the landlord's claims history can also impact costs.

Properties located in high natural disaster risk areas tend to have hefty premiums, and insurers assess the likelihood of disasters such as hurricanes, wildfires, hail storms, and floods when calculating rates.

Average property insurance premiums have risen by more than 30 percent since 2020, with the highest increases in areas with the most significant risk of natural disasters.

How to Budget for Costs

Landlords can budget for landlord insurance costs by considering several strategies:

• Include insurance premiums in the overall expenses for the rental property, deducting them from the rental income received from tenants.
• Consider policy types and, based on coverage needs and budget constraints, choose between Dwelling Policy 1 (DP-1), Dwelling Policy 2 (DP-2), or Dwelling Policy 3 (DP-3).
• Maintain the property regularly to reduce risks and potentially lower premiums.
• Increase the deductible to lower premium costs, but ensure you can cover the higher out-of-pocket expense if needed.
• Install safety features like security cameras and smoke detectors to qualify for discounts.
• Bundle insurance policies for multiple properties or with other insurance types for potential savings.
• Inquire about multi-property discounts or veterans benefits that may apply.
• The full annual premium upfront is often cheaper than monthly or installment payments.
• Monitor property value fluctuations to ensure you have the right coverage at the best price.

By implementing these strategies, landlords can effectively budget for insurance costs while maintaining adequate coverage for their rental properties.

Contact Us to Save on Landlord Insurance

Are you looking for an excellent price on landlord insurance? Contact us today! As independent brokers, we will shop the market to find you the best deal on quality landlord insurance!

Call American Insuring Group today at (610) 775-3848 or contact us online to start saving.

When managing rental properties, safeguarding investments is a top priority for landlords, and comprehensive landlord insurance is a pivotal tool in achieving this goal. This type of insurance provides an extensive safety net, offering all-risk coverage to protect against unforeseen damages and losses. It also covers legal liabilities, ensuring landlords can handle legal challenges or claims.

Moreover, comprehensive landlord insurance addresses potential tenant risks, protecting situations like tenant damage or eviction costs. Landowners can manage their properties with greater peace of mind and financial security by opting for a robust insurance policy.

All-Risk Coverage

All-risk coverage, sometimes called open-perils coverage, is the portion of a landlord insurance policy protecting against an array of potential risks or perils except those explicitly excluded in the policy. Unlike named-perils insurance, which only covers the risks specifically listed, all-risk coverage automatically safeguards against any loss or damage to property from events such as fire, theft, vandalism, or natural disasters.

This broad protection accommodates unexpected or uncommon threats, reducing the chances of coverage gaps. However, policyholders must carefully review the exclusions section since the policy might not cover standard items like wear and tear, war, or government actions.

Legal Liabilities

A landlord insurance policy protects property owners from financial burdens arising from legal claims or lawsuits. This coverage typically includes liability for bodily injury or damage on the rental property, such as an injury to a tenant or visitor from a slip and fall accident. It can cover legal defense costs, settlements, or judgments if the landlord is found liable.

Additionally, legal liability coverage may encompass claims related to wrongful eviction, invasion of privacy, or discrimination. With this coverage, landlords can mitigate the financial impact of legal disputes, ensuring that unexpected legal issues do not jeopardize their investment or economic stability. 

Protection Against Tenant Risks

Another component of comprehensive landlord insurance is protection against tenant risks. It shields property owners from financial losses related to tenant activities, including damage caused by tenant negligence or malicious acts, resulting in costly repairs or replacements. It may also cover loss of rental income if a property becomes uninhabitable due to tenant-induced damage.

Another aspect is coverage for the legal expenses of evicting a non-paying or problematic tenant, which can be lengthy and expensive. By safeguarding against tenant-related risks, landlords can maintain their financial stability and ensure that their property investment remains secure, even in the face of tenant-related challenges. 

We Can Help You Save on Landlord Insurance

Are you looking for the best price and coverage on rental property insurance? Contact our team today! As independent brokers, we will shop among competing insurance companies to find you the best deal on quality landlord insurance!

Call American Insuring Group today at (610) 775-3848 or contact us online to start saving.

Choosing the right landlord insurance involves assessing property type, location, and tenant risk. Compare policies to understand coverage limits, premiums, and deductibles. Consider specialized coverage for natural disasters or income loss. Comprehensive evaluation ensures your investment is well-protected against unexpected events and liabilities.

Factors to Consider

When selecting landlord insurance, consider several critical factors to ensure adequate protection for your property.

• First, evaluate the type and location of your property, as these influence the types of coverage you may need. For instance, properties in flood-prone areas may require additional flood insurance.
• Assess your tenants' risk profiles to determine liability coverage requirements.
• Understand the policy details, including coverage limits, deductibles, and premium costs, to ensure they align with your budget and risk tolerance. Consider loss-of-rental-income coverage to safeguard against unexpected vacancies due to covered events.
• Finally, review additional options, such as coverage for legal expenses or specialized protection for furnishings, if applicable.

Thoroughly comparing different policies and providers ensures adequate protection tailored to your specific needs.

Comparing Policies

When comparing landlord insurance policies, consider the previous factors to ensure comprehensive coverage and value for money. Start by examining the scope of coverage, including protection against property damage, liability for tenant injuries, and loss of rental income due to unexpected events. Evaluate the exclusions and limitations of each policy, as these can significantly impact coverage.

Next, review the premiums and deductibles for affordability while balancing the level of coverage. Check the credibility and financial stability of the insurance providers, as well as customer reviews and claims processes, to ensure reliable and efficient service. Finally, consider additional features that might be beneficial, such as coverage for legal expenses or emergency repairs, to tailor the policy to your specific needs.

Specialized Coverage Needs

Specialized coverage needs in landlord insurance cater to unique risks that standard policies might not address. Additional coverages like earthquake, flood, or windstorm insurance protect properties in natural disaster zones. These cover your property against severe weather events not typically covered by basic insurance. If your rental offers furnished accommodations, contents insurance safeguards against damage or theft of your belongings.

Consider rent guarantee insurance to protect against lost income due to tenant non-payment, ensuring financial stability. Legal expense coverage handles potential disputes with tenants, while unoccupied property insurance protects long-term vacant properties more susceptible to vandalism and damage. Lead paint liability coverage might be needed for older properties with potential lead paint exposure.

By considering and including these specialized coverages in your insurance policy, you ensure that you are well-informed and prepared for the unique risks that could affect your property's safety and financial security.

Contact Us to Save on Landlord Insurance

Are you looking for an excellent price on landlord insurance? Contact our team today! As independent brokers, we will shop the market to find you the best deal on quality landlord insurance!

Call American Insuring Group today at (610) 775-3848 or contact us online to start saving.

Landlord insurance provides a safety net for property owners who lease their homes, apartments, or commercial spaces. Unlike standard homeowners insurance, landlord insurance covers explicitly the unique risks associated with rental properties, such as property damage, liability exposure, and loss of rental income.

This article explains what a landlord policy covers, the different types available, and why landlords should view these policies as essential coverage.

What Landlord Insurance Covers

Landlord insurance typically covers three primary areas: property damage, liability protection, and loss of rental income.

• Property Damage includes coverage for physical damage to the rental property caused by fire, storms, theft, or vandalism. It can also cover aspects of the property, like the building structure and any appliances or furniture within the rental unit.
  
  
• Liability Protection shields landlords against lawsuits from injuries or property damage on their rental property. For instance, if a tenant or visitor gets injured due to a maintenance issue, the liability coverage can help cover legal fees and medical expenses.
  
  
• Loss of Rental Income coverage provides financial security. If the rental property becomes uninhabitable due to a covered event, such as a fire or severe water damage, this coverage can compensate the landlord for the lost rental income during the repair period.

Types of Available Landlord Insurance Coverage

In addition to the main types of coverage--property damage, liability protection, and loss of rental income--landlord insurance generally falls into a few other types, each designed to cover different aspects of rental property risks:

• Personal Property Coverage is for the landlord's personal property used to service the rental, such as appliances, tools, or furnishings provided with the property.
  
  
• Emergency Coverage provides financial assistance for immediate repairs to protect the property after a damaging event.
  
  
• Rent Guarantee Insurance safeguards the landlord against tenants defaulting on rent payments. It helps ensure steady cash flow even when tenants fail to pay.

As with many insurance policies, landlords can tailor coverage to meet specific needs.

Common endorsements to consider adding:

• Vacant Property Endorsement covers the dwelling if left unoccupied for an extended period, usually 30 to 60 days.
  
  
• Vandalism Endorsement is a good idea in an area with higher crime rates since insurers might not cover it in a standard landlord insurance policy.
  
  
• Burglary Endorsement can provide additional coverage for stolen items like lawnmowers or snow blowers.

These endorsements will likely increase your premium, but they can offer valuable additional protection tailored to your unique needs.

Essential Coverage for Property Owners

Landlord insurance is essential because it protects property owners from financial loss from property damage, liability claims, and loss of rental income. It ensures that landlords are covered against unforeseen events like fires, storms, or tenant injuries, providing peace of mind and safeguarding investments. Without it, landlords could face significant out-of-pocket expenses for repairs, legal fees, and lost rental income, jeopardizing their financial stability and business.

Contact us for the best rates on landlord insurance!

We are independent brokers, shopping the market to find the best rates on quality landlord insurance designed to meet your needs! So call American Insuring Group today at (610) 775-3848 or contact us online to start saving immediately. 

Landlord insurance is essential for anyone who rents out property. 

But how much does it cost? That’s the big question. 

Fortunately, this article provides answers. We explore how insurers calculate premiums and the factors that influence how much you will ultimately pay. By the end, you should understand what you can afford. 

Premium calculation

Premium calculations begin with a thorough property assessment. Insurers inspect structures to determine how much rebuilding will cost in case of serious damage or a fire. 

Next, they ask you the amount of coverage you need. Some landlords require more than others, so it is always a personal decision. If you go to an insurance broker, they will give you quotes from assorted carriers. You can use these to determine insurers offering the best risk-reward. 

During this process, insurance companies calculate the effect of deductibles (discussed below). Usually, you have a choice of how much you want to contribute to the cost of repairs (should they become necessary). 

The last step is to review the policy terms and decide if you are happy with them. If you are, sign on the dotted line. 

The average cost is around $1,895 annually. However, you may pay more, depending on your circumstances.

Influencing factors

Numerous behind-the-scenes actors determine the cost of landlord insurance (similar to other insurance policies), including: 

• Property Location

Property location is one aspect that can affect insurance costs substantially. Areas prone to natural diseases (like flooding or wildfires) usually command a higher premium than those in safer regions. Other factors, like crime, can also play a role. 

• Property Value

The value of the property can also affect the cost of landlord insurance. The costlier it is, the higher the premiums (similar to car insurance). 

Multi-family homes and larger developments are at risk of higher costs because of the valuation effect. However, insurers sometimes charge more for older properties if they believe they have a higher risk of damage or liability. 

• Deductible

You can occasionally lower your monthly insurance premiums by raising your deductible. The more you are willing to contribute, the lower the perceived risk by the insurer. However, if you make a claim, you have to pay more. And that can increase overall costs. 

• Coverage Amount

Coverage amount also affects landlord insurance premiums. The more protection you want, the higher the premium. 

For example, expect to pay extra for things like loss of rental income or liability coverage. 

• Tenant Type 

Lastly, insurance premiums can sometimes vary by tenant type. Insurers often view renting to students and short-term renters as risky because they have reduced incentives to avoid property damage. 

By contrast, long-term renters (with professional qualifications) often have lower risk profiles. These individuals are less likely to cause damage, keeping costs down. 

Once insurers have these details, they can enter them into the actuarial tables and calculate the risk you pose. Then, they can use this information to calculate a suitable premium. 

Contact us to Save on Landlord Insurance

If you are looking for a great price on landlord insurance, contact our team today! As independent brokers, we shop the market to find you the best deal on quality insurance!

So call American Insuring Group today at  (610) 775-3848 or contact us online to start saving.

Landlord Insurance is crucial when protecting your investment; however, effective landlord-tenant communication – which doesn’t cost a dime / just a little time and effort—is just as important. We understand that, as a landlord, you have a lot on your plate, from screening applicants to maintaining your property; however, taking the time to communicate with your tenants could save even more time and effort down the road.

Communication is crucial from the time a potential tenant fills out the application to when they move out. It can help avoid misunderstandings, prevent conflicts, lower tenant turnover, and protect your property, saving time and headaches. Good communication between you and your tenant(s) can also save you money, resulting in higher profits.  

The Cost of Tenant Turnover

Tenant turnover is a costly part of property rentals that landlords and property managers can’t ignore. Tenant turnover creates vacancies, eats up more of your time, and lowers your profit. According to Apartments.com, the average turnover cost ranges from $1,000 to $5,000.

This cost can come from the following and more:

• Cleaning the unit
• Getting rid of anything left behind
• Changing locks
• Possibly re-painting
• Repairing any damage
• Advertising
• The lost income from a vacant unit
• Screening applicants
• Higher insurance costs if it remains vacant

“Reducing turnover isn’t just about preparing a vacant unit for a new tenant; it’s also about retaining good tenants. Landlords can save time, money, and effort by implementing tenant retention strategies. This includes responsive maintenance, periodic property inspections, and creating a positive living environment that encourages tenants to renew their leases,” Swiftland states. “By focusing on tenant satisfaction and fostering positive landlord-tenant relationships, landlords can significantly decrease the turnover rate, ensuring a more stable and profitable rental property.”

A vital component of “fostering positive landlord-tenant relationships” is effective communication.

Tips for Effective Landlord/Tenant Communication

1. Properly Screen Tenants
   Good communication should begin before you allow a tenant to move into your property by adequately screening them: run credit, background, and employment checks and conduct an in-person interview.
   
   
2. Set Clear Expectations
   Begin setting clear expectations during your first contact with them. Before they sign the rental agreement, verbally go over key points, such as rent payments, policies or rules, and maintenance responsibilities. It also doesn’t hurt to remind them of policies occasionally.
   
   
3. Be Responsive
   Address maintenance issues as quickly as possible. If a tenant contacts you with a question you can’t answer immediately, let them know that you understand their question and that you are working on getting the answer.
   
   
4. Foster Trust
   Trust is earned, and you can earn your tenants’ trust by responding quickly, keeping them updated and in the loop, and always being honest with them.
   
   
5. Provide Multiple Communication Channel Options
   Just like your friends and family, you will discover that everyone has different communication channels they prefer – text, email, voicemail, etc. You can ask them what their preferred channel is when they first move in. In addition, certain communications should be delivered through certain channels. For example, longer messages can be sent by email, quick communication can be made through text, and important communication is usually best done through a phone call or letter.
   
   
6. Use Written Communication
   Having written documentation, such as an email or text, can help both parties understand what is being said and provide evidence if a dispute occurs.
   
   
7. Be Friendly and Professional
   You want to act like an efficient waitperson or sales clerk and find the perfect balance between being professional (responding to their needs, getting back to them promptly, etc.) and friendly (asking them how they are, talking about the weather, smiling, etc.).
   
   
8. Keep Messages Simple
   If you’re sending an email or text or leaving a voicemail, you may be tempted to give every detail, but short and simple is usually the most effective way to communicate. Let them know what the issue is or what is going on without giving details that aren’t relevant. Don’t use big words.
   
   
9. Solicit Feedback
   Retailers understand the value of feedback. Landlords can use the same tactic by sending out short surveys, conducting quick interviews, or simply asking for verbal feedback.
   
   
10. Conduct Exit Interviews
    Conduct an exit interview when tenants leave and ask why they are moving out. The answer may be something you can’t control, such as they’re moving into a bigger place, buying a home, etc., or it could be something you can control with future tenants, such as maintenance issues, lack of communication, etc. 

Protect Your Investment With the Right Landlord Insurance

At American Insuring Group, we offer comprehensive landlord insurance policies that cover a range of risks, from property damage to liability claims. Our affordable policies protect your investment and give you peace of mind.

Call us today at (800) 947-1270 or (610) 775-3848, or connect with us online.

Most property owners understand the importance of protecting their property with adequate insurance. If you're looking for insurance to protect the home you and your family live in, homeowners insurance is probably the answer.

However, if you rent out a room in your house, have a vacation home you rent out when you aren't using it, or rent your home out occasionally (for special events), homeowners insurance may not be adequate. And if you own a rental property with tenants, homeowner insurance is definitely not enough.

Historical data shows that tenant-occupied properties pose more risk than owner-occupied properties. Therefore, if you have homeowners insurance on a property occupied by tenants and need to make a claim, it probably won't be covered, making all those insurance premiums a waste of money. It isn't enough just to have insurance; you need to have the right insurance.

One of the experienced insurance agents at American Insuring Group can help ensure that you have the right insurance to protect your property, but here is some basic information to consider.

The Difference Between Landlord and Homeowners Insurance

• Occupancy
  Who lives on the property? This is the most significant difference between landlord and homeowners insurance. As we mentioned, homeowners insurance is probably your best bet if you and your family live in the home. However, if you rent an investment property out to tenants, you should have landlord insurance. Renting out a room or occasionally renting out the property is more of a gray area. Sometimes homeowners insurance will suffice, sometimes your homeowner's coverage may need to be adjusted, and sometimes the only thing to protect your property is landlord insurance.
  
  
• Property Coverage
  Typically, both homeowners and landlord insurance cover damages to the structure caused by covered perils, but coverage for personal property is different. Homeowner insurance typically covers all personal property (furniture, jewelry, household goods, etc.), whereas landlord insurance does not cover the tenant's personal property. Furthermore, if the property owner has furniture, appliances, landscaping equipment, etc., in the rental property, they need to consider that when choosing their landlord insurance policy.
  
  
• Pricing
  Because tenants pose more risk, landlord insurance typically costs about 25% more than the standard homeowner's insurance.
  
  
• Loss of Use vs. Loss of Rent
  Both homeowners and landlord insurance provide coverage when a property is damaged by a covered peril, rendered uninhabitable, and under repair. However, homeowners insurance provides coverage for loss of use (reimbursement for living expenses, such as accommodation and meals), and depending on your policy, landlord insurance covers loss of rent (rental income reimbursements to help cover ongoing expenses)

Types of Landlord Insurance

There are three types of Landlord Insurance: DP-1, DP-2, and DP-3. DP-1 offers the most essential coverage, DP-3 provides the most comprehensive coverage, and DP-2 falls in between.

• DP-1 offers the most affordable and least comprehensive coverage. It only covers perils named explicitly on the policy - fire, lightning, smoke, explosions, vehicles, aircraft, riots or civil commotion, volcanic explosions, windstorms, and hailstorms. DP-1 pays out the actual cash value (ACV) of the lost property. In other words, it determines your payout based on the original cost minus depreciation. That means you may not receive enough money to repair or replace an item at the current cost.
  
  
• DP-2 covers only perils specifically named on the policy, but it does include more perils, such as burglary, collapse, the weight of snow and ice, etc., than DP-1 policies. Unlike DP-1, DP-2 policies pay claims based on replacement cost value (RCV), which pays for repairs or replacements based on current costs.
  
  
• DP-3 is the most expensive option but offers the most protection. It covers all perils unless the peril is explicitly excluded in the policy. DP-3 typically pays out claims based on the RCV. It also covers loss of use, liability, and personal property you have on the property.

Do You Have the Right Insurance for Your Property? We Can  Help!

The independent insurance agents at American Insuring Group can ensure that you have the right insurance for your specific needs. Then, they carefully compare rates and coverage from competing insurance companies to find you the best price!

Call us today at (800) 947-1270 or (610) 775-3848, or connect with us online.

Historically, buying real estate has been a lucrative investment. "For the past decade, real estate has ranked as Americans' top investment pick, with 34% of Americans identifying real estate as the best long-term investment in 2023," according to Investopedia. "That puts real estate ahead of gold (26%), stocks and mutual funds (18%), savings accounts and certificates of deposit (13%), and bonds (7%) as the favored long-term investment."

As with just about any investment, buying real estate comes with its share of risks that need to be considered and addressed to succeed. Landlord Insurance can help protect you from some, but not all, of those risks.

Whether you want to purchase a property, fix it up, and sell it for a profit or rent it out and receive a monthly income from tenants, here are five tips to be successful in real estate investing.

1. Determine Your Goal
   Due to the high value and low liquidity of real estate investments, you must determine your goals before diving in or risk losing a lot of money. Do you want to buy a home to live in and build equity in rather than continue to pay rent? Do you want to buy a property and have a regular income through rental payments? Do you want to buy a property, hang onto it, and hopefully sell it for a profit, or do you want to buy a property, fix it up, and again, hopefully, sell it for a profit? You need to be clear on your goals before purchasing a property.
   
   
2. Do Your Research.
   Again, unlike buying stocks and bonds, if something goes wrong, you can't quickly bail out of a real estate investment, so before jumping in, do your research. Determine if you are in a buyers' or seller's market to help you decide if now is the right time to invest in real estate. Find out how much of a loan you will qualify for and the amount of the mortgage payments. Research if the property you're considering buying is in a good location (still one of the most crucial factors in real estate investment profitability) and if the property is in good condition or will require costly repairs. If you're planning on renting the property out, ask if the property currently has a tenant, how much they're paying, the rate of vacancy, etc. You must also know the rules and regulations, such as zoning laws, required permits, etc. Before diving into real estate investment, do as much research as possible to help avoid costly mistakes.
   
   
3. Understand Your Expenses
   Understanding your expenses is especially crucial when purchasing a rental property. You need to know approximately how much utilities, property taxes, and landlord insurance will cost. You need to allow for maintenance, repairs, improvements, and property marketing costs. Even if you're buying a property to immediately turn around for a profit, you need to figure in appraisal fees, home inspection costs, and closing costs. If you plan on doing work on the property before selling it, you need to determine the approximate cost of the work and business permits.
   
   
4. Have a Cash Reserve
   Things happen - the building needs a new roof, a tenant doesn't pay, etc. Setting aside a reserve of money to help cover these unexpected expenses can mean the difference between success and failure.
   
   
5. Manage Risk
   Managing risk can take many forms. Determining your goals and researching helps minimize the risk of getting in over your head or buying the wrong property. Understanding your expenses and having a cash reserve helps reduce the risk of being forced to sell the property at a loss. Ensuring the safety of your property and tenants - screening your tenants and installing smoke detectors, fire extinguishers, security cameras, etc. - can also help you manage risks.
   
   
6. Get Landlord Insurance
   Another way to manage risk and protect your investment is with the right Landlord Insurance. It's best to consult an experienced insurance agent to ensure you have the right insurance to protect your property. For example, did you know that if a rental unit is vacant for an extended time, you may be required to purchase Builder's Risk Insurance because the risks associated with a vacant property are different from those of an inhabited property; therefore, your regular landlord insurance policy may not cover the damage.

Do You Have the Right Insurance for Your Investment Property?

Landlord insurance is essential for protecting your investment property, but you don't want to overpay for coverage. The independent insurance agents at American Insuring Group carefully compare rates and coverage from competing insurance companies to find you the right policy at the right price!

Call us today at (800) 947-1270 or (610) 775-3848, or connect with us online.

Many new real estate investors assume homeowners' insurance will cover any damage or liability associated with their rental property. However, if you are not the resident of a property and instead rent it out to someone else – whether it's for a week or several years – you need Landlord Insurance, not Homeowner's Insurance, to protect yourself and your assets.

Why? Insurance is all about risk, and renting out your property to someone else increases risk. Therefore, if something happens to a rental property or someone is injured on the property, homeowner's insurance will not cover you. Furthermore, if you have a mortgage on the property, your lender will most likely require Landlord Insurance if you are not a property resident.

What is Landlord Insurance?

Landlord Insurance is a unique type of homeowners' insurance that protects your rental property, whether it's a house, condo, guest house, apartment building, commercial building, etc. It covers many of the risks that homeowner's insurance covers and more.

A good Landlord Insurance policy typically protects against three main risks:

• Property Damage helps replace or repair damages to your property caused by fire, theft, vandalism, natural disaster, etc.
• Lost Rental Income helps pay for lost rental income if the property is not inhabitable due to damage, severe mold, rat infestation, etc.
• Liability Protection helps pay for medical and legal costs if someone is injured on your property.

You may hear the terms DP-1, DP-2, or DP-3. DP stands for dwelling property. DP-1 provides the most basic level of coverage, and DP-3 provides the most comprehensive coverage.

The cost of Landlord Insurance can vary, based on the following factors:

• Location
• Age and condition of the property
• Security and safety equipment
• High-risk features, such as pools and fireplaces
• Short-term vs long-term tenants

Typically, Landlord Insurance costs about 25% more than a standard homeowner's insurance policy. Although it is not required by law, most lenders will require Landlord Insurance, and it makes good business sense.

Additional Riders to Consider

To choose the right coverage for your property, you need to consider the potential risks, how much cash reserve you have, etc. For example, if the property is near a river, you may want to consider flood insurance, or if you have little or no cash reserve and rely on the rental income to pay the mortgage, you may want to consider guaranteed income insurance.

Here are a few of the riders you may want to consider adding to your insurance policy:

• Rent Guarantee (Aka Tenant Rent Default)- Covers you if a tenant skips out without paying rent.
• Sewer and Water Line Backup– A break in your sewer or water line can cause a great deal of damage. Sewer and Water Line Backup coverage can help pay for repairs and cleanup.
• Pet –Allowing tenants to have pets can reduce vacancy and enable you to charge higher rents. However, pets can cause damage or injuries, so if you decide to make your property pet-friendly, you may want to consider pet coverage.
• Flood– FEMA states, "In simple terms, a flood is an excess of water on land that is normally dry."
• Non-occupied Dwelling – If a unit or property is vacant and damage occurs, landlord insurance may not cover it; however, non-occupied dwelling insurance typically does.
• Burglary – Although the renter is responsible for his personal property, landlords often have property in rental units, such as washers and dryers, refrigerators, etc., that can be stolen.

10 Questions to Ask Your Insurance Broker About Landlord Insurance

The experienced agents at American Insuring Group are always happy to address any questions you may have. Here are some questions to ask:

1. What are the deductibles on my policy?
2. Does the policy provide replacement cost or cash value?
3. Does the policy cover flooding, and what kind of flooding – natural disaster, sewer backup, etc.?
4. Can I do anything to lower my insurance costs for my rental property – upgrades, repairs, etc.?
5. Do you recommend any additional coverage?
6. Do I qualify for any discounts?
7. Does the policy cover both short and long-term rentals?
8. Do I need a separate umbrella policy?
9. What is NOT included in my policy?
10. Will bundling multiple policies help lower the cost?

#1 Tip to Lower Landlord Insurance Costs Without Affecting Coverage!

Contact one of the independent agents at American Insuring Company who specializes in Landlord Insurance. They understand your needs, can make recommendations, answer any questions, and ensure you have the right insurance (no gaps, but also not paying for coverage you don't need). Plus, as independent agents, they will compare the cost of your coverage among many insurance companies to ensure you receive the lowest insurance premiums for the protection you need.

Call us today at (800) 947-1270 or (610) 775-3848, or connect with us online.

Investing in rental property and becoming a landlord is a viable income stream for many Americans. According to Doorloop, approximately 17.1 million properties generate income in the U.S., earning as much as $97,000 annually (more than $35,000 above the median household income).

However, landlords need to make intelligent decisions, avoid mistakes, and protect their investments with Landlord Insurance to make that kind of income. Simply buying a property, making a few renovations, and renting it out – without taking necessary precautions – can lead to financial loss and more problems.

5 Common Mistakes Landlords Make

1. Not Properly Screening Tenants

When you rent out your property, you are handing it over to a stranger; therefore, it's imperative that you properly screen all tenants before handing over the keys. Although you may be concerned about quickly renting out your property and avoiding vacancies, you need to do whatever you can to help ensure that your tenants will pay their rent on time and not trash your property.

Stessa recommends the following steps when screening applicants:

• Set minimum applicant requirements
• Request a completed rental application
• Run credit, rental history, and background check
• Speak with current employer and landlord
• Interview the applicant
• Review all applicants
  
  

Most rental property owners compare their monthly costs with anticipated rental income to determine their profit. Many rely on rental income to pay all or part of their monthly mortgage payments. However, some fail to budget for months when the unit is vacant and providing zero income.

How often your rental property will be vacant and for how long varies greatly depending on the area, the economy, the condition of your property, etc., but it's safe to say that your property will be vacant at some point.

Therefore, when estimating your cash flow, always estimate for months with zero-dollar income from your rental property and ensure that you can continue to pay your mortgage, property taxes, maintenance costs, etc., when (not if) that happens.

3. Neglecting Property and Tenants

Although rental income is considered passive income, that doesn't mean that you can be passive when it comes to your property and tenants. You must ensure that your property is appropriately maintained to comply with the Pennsylvania Landlord Tenant Act, avoid injuries that can lead to lawsuits, and keep minor issues (a leaky faucet) from becoming more expensive repairs (replacing flooring). Landlords should regularly inspect their rental properties to watch for maintenance issues and perform routine maintenance (such as replacing air filters, testing smoke and carbon monoxide detectors, checking fire extinguishers, etc.).

You should also regularly check in with your tenants to ensure there aren't any issues that need to be addressed.

4. Not Treating it Like a Business

Too many landlords treat their rental property like a hobby. To be successful (enjoying an income and avoiding unnecessary headaches), you must treat your rental property like a business. That means conducting market research before purchasing a property, keeping records (financial, maintenance, etc.), estimating costs, building a financial reserve, having a marketing strategy, enforcing the lease, knowing when and how to evict a tenant, etc.

5. Not Getting the Right Landlord Insurance

One of the biggest mistakes many new landlords make – especially if they're renting out a single-family home – is to assume their homeowner's insurance policy will protect them if the rental property incurs damage or someone is injured on the property. Insurance is all about risk, and renting your home to someone else increases risk; therefore, most standard homeowner's insurance policies do not cover damage or injuries if you rent your property to someone else.

The right Landlord Insurance fits your specific needs and helps protect your property and so much more.

Don't Pay Too Much for Landlord Insurance!

As Landlord Insurance specialists, the agents at American Insuring Group understand your unique concerns and insurance needs to ensure you get the right insurance coverage. As independent agents, we compare your insurance coverage with multiple competing insurance providers to ensure you get the best price on quality coverage. 

Call (800) 947-1270 or (610) 775-3848, or connect with us online.