When you give your property – both commercial as well as homes – out on rent, you are sure to have a property insurance. Your regular insurance that you have over your property may not pay up if the insurer comes to know that you have given your property out on rent.
There are risks that come with renting your house out to tenants. Fire accidents to theft and wind to ice, there are a lot of damages that your property may face. A landlord insurance policy can help you get through most of the things that you and your property may encounter.
Landlord insurance policies
Landlord insurance policies are more commonly known as dwelling place policies and are of three types – DP1, DP2 and DP3.
DP1 – Dwelling Place 1 is the most basic form of coverage and offer cover for very specific kinds of damage like fire and vandalism. Another feature of the DP1 is that it will offer only cash value of the home when settlements are filed.
DP2 – The Dwelling Place 2 landlord insurance is a more specialized kind of insurance where the scope is slightly wider and will cover every named peril as long as it is explicitly mentioned in the agreement.
DP3 – Dwelling Place 3 is an open peril policy where every type of damage, apart from a list of mentioned exclusions will be covered at replacement cost. It is a bit more expensive than the other two, but offer the best kind of coverage and value.
Note that you will have to keep your property under landlord insurance cover even if, at the time, you may not have any tenants and the home is locked. Also, make sure your tenants have a rental insurance so that their personal items are protected.