Landlord liability insurance typically protects against all of the primary items a traditional homeowner's insurance policy protects against with the addition of:
"� Tenant damage or tenant guest damage
"� Tenant injury or tenant guest injury
Tenant damage or tenant guest damage refers to any damages that the tenant or his guests make to your property during the time that you're renting it out. Whether a tenant trashes the rental home before leaving or simply fails to maintain the property at all during their stay there, landlord insurance means the owner doesn't have to pay out-of-pocket to make repairs.
An uninhabitability clause follows a similar purpose to tenant damage or tenant guest damage, but goes significantly further as it is intended to protect the landlord against damage that makes rooms or even the entire building uninhabitable. During repairs and inspections, you can't rent out that apartment or house, and that results in a significant loss of profit. Landlord insurance will sometimes cover you for as long as twelve months, provided it takes that long to make the repairs in question.
Tenant injury and tenant guest injury clauses provide protection both from medical and legal bills that arise from injuries on the rental property. In most states, you, as the landlord, will be liable for harm that occurs because of certain injuries on the property. The tenant must generally prove that you were somehow negligent in your maintenance of the rental property or that your failure to act caused the injury. But some states, like New York, have a fairly low standard for determining landlord liability. This particular rental insurance clause provides a way to cover the medical expenses of tenants and their guests, as well as the legal fees. Some rental insurance companies even provide legal counsel options if you decide you don't want to represent yourself.
Homeowners Insurance vs. Landlord Liability Insurance
Landlord insurance can be expensive, but it helps protect you against some of the specific risks you'll face when dealing with tenants. In most states, landlords don't have to take out special insurance for their rental properties. Homeowner's insurance tends to be the basic insurance coverage option that many landlords choose. But traditional homeowner's insurance primarily protects the property without protecting against the tenants' actions since, in a traditional policy, willful acts are generally excluded. Uninhabitability protection isn't covered under homeowner's insurance either, and tenant injuries do not receive the same coverage necessary to protect you in such a case.
This article contains general legal information and does not contain legal advice. Rocket Lawyer is not a law firm or a substitute for an attorney or law firm. The law is complex and changes often. For legal advice, please ask a lawyer.