Being a landlord comes with a set of responsibilities. If you are renting your property to tenants, consider purchasing Landlord Insurance to protect yourself. Tenants are defined as individuals or groups who signed a rental agreement with the landlord allowing them to live on the property. The rental agreement defines the responsibilities of a landlord and often also lists the requirements for Landlord Insurance. The landlord coverage protects you from financial losses associated with rental, including fire, weather damage, theft, and can be extended to protect from intentional damage by tenants and unpaid rent.
Landlord Insurance is not required by law; however, the mortgage lenders may require the landlords to carry insurance. Moreover, if you would like to protect your finances, it might be better to have an insurance agreement in place which can serve your responsibilities better.
Even if you might not think about it, you are essentially operating like a business, since you earn money through rent. This makes Homeowner’s Insurance not suitable for your property. Even though it offers buildings coverage, it will not cover you adequately for legal, liability, and loss of rent options offered by the landlord’s policy. Moreover, your home insurance may be invalidated if you do not let your insurance provider know about renting out your property. Thus, as soon as you start renting out, choose a landlord’s policy in order to protect your finances and earnings.