Hello, greetings from Colorado Springs! My name is Lance Kohler, and I'm the broker-owner of Cornerstone Real Estate Team. Today, I'd like to talk about landlord insurance—insurance for your rental property or investment property—and three clauses you should consider when reviewing your policy.
Clause 1: Damage and Liability
The damage and liability clause will cover the cost of repairs for fire, storms, or vandalism on your rental or investment property. You should check the specifics of your policy to see exactly what's covered and under what conditions.
For example:
Fire: What fire-related incidents are covered?
Storms: Are all types of storm damage included?
Floods: Does the policy cover flooding caused by external or internal factors?
We’ve seen cases where a water main broke in a single-family home, causing significant damage. In another instance, a garden-level apartment had its window wells fill with water, leading to flooding.
For vandalism, policies can vary. Some may cover damage if the property is unoccupied, while others might include coverage for tenant damage prior to their leaving the property. So, look into the specifics of your damage and liability coverage.
Clause 2: Income Protection
Income protection covers you if the property becomes uninhabitable.
For instance, if a flood, water break, or fire makes the property unlivable, and tenants cannot stay there, this clause will compensate you for lost rental income. We highly recommend looking into whether your policy includes income protection.
Clause 3: Legal Protection
Legal protection may cover costs related to:
Evictions
Property disputes
Any liability issues related to your property
Having this clause in your policy can provide significant peace of mind in situations that require legal support.
To recap, here are the three clauses to look for in your landlord insurance policy:
Damage and Liability
Income Protection
Legal Protection
Thanks for your time, and make it a great day!