The landlord's rental insurance is important for any rental unit, no matter if the mortgage is repaid. This policy protects the property and rights of the owner for a much cheaper cost than the standard homeowner's insurance. The house and all structures on the property are protected from tenant damage, harsh weather or unplanned events.
The landlord insurance reimburses the repair of this damage. Cleaning and repair due to water, sewers, evacuation or sump pumps are included. Damage caused by lightning, high winds and hail are dealt with as well as fires and explosions. During the renovation and repair process, any loss of rent from the vacancy is reimbursed to the owner for a maximum of one year. The structures on the property such as a garage or shed are also covered. Although the tenant's personal property is not covered, all personal property owned by the owner, stored on site or left to the tenants' use, is also covered. Landlords are also protected if the tenant or visitor is injured on the property.
There are different types of rental housing insurance available. The comprehensive insurance covers most situations and specifies everything that is not included. Risk policies offer less coverage and indicate exactly what is covered. The landlord's rental insurance covers buildings from one to four families. The condo owner's insurance is for condominiums.
There are generally three payment methods after damage claims are filed and approved. The actual cash value takes into account depreciation when calculating repayment figures. The replacement value does not take into account amortization when paying replacement costs. The settlement of claims agreed is the amount paid on the total loss of the house which corresponds to the amount stated on the policy.