Chances are that if you’re a real estate investor, you appreciate the value of having property insurance coverage on an income property, be it a full-time tenancy or an Airbnb. But do you also have landlord liability insurance coverage? And if you’re a homeowner with a rental unit in your basement, are you sure that your homeowner’s policy is the right coverage for you?

If you own property that you use as an income source, you need to know that if disaster strikes, that not only are you covered for property damage, but that you are also protected from legal liability and from the loss of income during repairs if you rely on the cash flow. As a real estate investor, it’s also crucial that you partner with reliable legal professionals like the real estate lawyers at Axess Law. They provide cost-effective, convenient online legal real estate services with the efficiency required in professional real estate investing.

Part of a real estate lawyer’s responsibility is to ensure that a property is sufficiently insured and that their clients are fully protected. If you own an investment property, some or all of the following insurance coverages may be for you.

Landlord Liability Insurance

Landlord insurance policies/packages are designed to protect you and your investment from property damage and liability. Many also offer rental income protection in case a covered peril renders your rental unit uninhabitable or a tenant defaults on the rent.

Situations in which a landlord liability insurance package can provide coverage include:

• Liability protection in case someone is injured on your rental property or a third party’s property is damaged due to an incident originating from your property, like a fire or water damage.
• Protection for the structures on your property from covered perils such as fire, flooding, windstorms, sewage backups, etc.
• Coverage for theft, break-ins and vandalism.
• Contents coverage for appliances, furniture, electronics, valuables and other belongings.

If you own a condominium unit, you may need specialized condo insurance. While a part of your condo fees is for insurance coverage, it usually only covers common areas like the hallways, elevators, lobby, exercise rooms, etc., as well as issues stemming from behind the interior facing walls in your unit. This can leave damage or loss occurring inside your unit uncovered.

It’s also vital to know that if you or your tenant are responsible for damage to an area covered by the condo’s insurance policy, the insurance company may decide to sue you for the deductible or for costs that exceed the policy limit. Acondo insurance policy is designed to protect you from liability in these situations.

Using Homeowner’s Insurance When You Rent Out a Portion of Your Home

Some home insurance policies have the option of getting a rider or exception added to it that allows you to rent out a part of your primary residence to commercial tenants. This only applies to tenants at your primary residence. You would likely have to pay extra for that coverage because of the increased risk. If you do need to make a claim, your rates could increase significantly, or your policy cancelled outright, leaving your home uninsured.

Having dedicated Landlord Insurance coverage is the best way to ensure that if you do need to make a claim, that it will be covered, that your primary residence is protected, your rental income is covered and that you don’t risk losing your home insurance coverage.