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Landlord Insurance

When you make that foray into being what is anachronistically referred to as a “landlord,” whether it be renting out a room in your home or buying an entire apartment building, one of the first concerns for many to consider is the kind of insurance to purchase. One thing for sure is that landlord insurance is a top priority.

If you have the intention of renting out a room in your home or have invested in properties for this reason, then you will benefit from this kind of insurance. It protects you from liability issues, such as property damage or claims of injury should one of your tenants slip and fall on a slick patio for example. Many of these policies can also assist you in recovering any lost rental income due to a property being unlivable and due to it being repaired or upgraded for safety. Remember, that this kind of coverage is normally for non-commercial properties only.
There are 3 kinds of coverage generally available when one is buying landlord insurance and they are DP-1, DP-2, and DP-3. The “DP” stands for dwelling policies. DP-1 is the basic, entry-level policy that covers loss from disasters such as fire, vandalism, high winds, hail and other happening that can create havoc upon your property. A DP-2 kind of policy has more features and will also provide extra coverage for losses that are specifically delineated in the policy such as a powerful windstorm in the Kansas or a hurricane in the Florida Keys.

A DP-3 policy is the cream of the crop of these types and is often known as an “open peril” or “special form” policy. This coverage protects the policyholder not only like the first two mentioned but will also pay out for any incident or damage that is not specifically excluded from the coverage. Some of these packages will even cover you for damage resulting from a collision someone accidentally drives their car into the property’s foyer for example. This policy choice allows for the full replacement cost, not just an assigned cash value. For example, if a garage is ten years old, it will normally be depreciated in cash value and thus the payout would be far less than the actual value of replacement. This coverage applies not just to the building, but extends to any equipment you might have on the premises for tenant use.

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