From Anchorage to Juneau, Alaska is teeming with rental properties. Whether you are renting out your rural Alaska single family home to supplement your income stream, or you own several urban apartment complexes, the value of obtaining a comprehensive landlord insurance policy cannot be overstated.
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Before you search for landlord insurance quotes, however, there are several factors to consider.
Alaska Rentals By the Numbers
According to market analysis:
- With more than 37 percent of AK residents renting their home, condo or apartment, the state is the fourth leading region in the country in terms of rental properties, behind only Hawaii, New York and Nevada.
- The gross median rent in AK was $1,120 in 2012. The national gross median rent paid during the same year was a little more than $800.
- Alaska as a whole experiences a 5.62 percent rental vacancy rate, and in areas such as Anchorage it is even lower at just over 4 percent, making the state appealing for potential landlords to meet demand.
What Is Landlord Insurance?
Landlord insurance operates much like any homeowners or property insurance in that you pay a monthly premium. Should you need to file a claim for a covered event such as a fire, break-in or tenant damage, your insurance company can help pay for repairs or replacement of your property.
Landlord insurance is different from a traditional homeowners insurance policy because renters tend to cause more damage to a property than owners. Landlords also face a different set of risks than owners and they need an insurance policy that mitigates those risks.
Am I Required to Carry Landlord Insurance in Alaska?
Although not required by Alaska state law, landlord insurance is strongly recommended for any investment property owner who plans on leasing their home, condo or apartment. That's because the vast majority of traditional property insurance policies will not cover any damage caused by tenants if the home or unit is being rented out.
If you rely on the revenues your rental property contributes to your budget, finding a landlord insurance policy to cover your potential losses is a must.
What Does Landlord Insurance Cover?
Most insurance companies will offer you a variety of coverage options from which to choose as you build your landlord insurance policy, including:
- Property damage: This can help pay for repairs to your rental property if it is damaged by fire, severe weather, theft, vandalism or your tenants. Ideally, your landlord insurance will cover the replacement costs for your entire rental property in the event of a total loss.
- Liability insurance: This can help pay for repairs to another person's property or medical treatment should they be injured as a result of negligence on the part of you, the owner. For example, if a pipe bursts in your rental property and destroys a tenant's TV, this coverage option can help pay for the replacement of the item. Additionally, if a delivery person slips and falls on an icy step and is injured, this can help pay for their medical treatment. This coverage option also protects you, the landlord, from lawsuits by helping to pay your legal fees and court costs should a tenant or guest sue you for damages or injuries.
- Loss of income: This optional coverage can help compensate you for lost income in the event that a rental property becomes uninhabitable due to a covered loss, such as a storm or apartment fire. Your loss of income coverage, or rental reimbursement, will prevent you from losing the income you would have had if you were collecting rent.
- Optional coverage: As a landlord, you can buy additional coverage, such as rent guarantee insurance, natural disaster insurance, employer liability insurance and landlord contents insurance to cover your personal property items such as furnishings or carpet in the rental property.
Do I Have to Cover My Renters' Property?
Your landlord insurance policy extends only to that which you own. Therefore, unless you are found liable for any damages to your tenants' property, your insurance policy will not cover the items your renters keep in the home or unit.
Many landlords choose to require their tenants to purchase renters insurance policies as part of their lease agreement. You may choose to include such a policy in your own documentation. This not only ensures your renters are covered in the case of fire or theft, but it can help prevent renters from trying to sue you for damages if they have the protection of their own insurance policy.
What Will My Landlord Insurance Quote Look Like?
Because landlords vary from the single family dwelling owner to the real estate mogul who owns several high-rise apartment complexes, it is difficult to estimate the average cost of landlord insurance. Most insurance companies take several factors into consideration when they calculate your landlord insurance quote, including:
- Your location: Rental properties in high-crime areas will see higher quotes than neighborhoods that experience few property crimes.
- The size and value of the structure: Larger, more expensive buildings will see higher quotes than smaller, less valuable homes or complexes.
- How many rental units you have: More units typically mean higher quotes.
- The age and condition of the building: Older buildings with outdated electrical systems will see higher quotes than new units with up-to-code heating and energy systems.
- The risks you face: Whether you allow smoking in your units or if your complex has things like a fitness center or swimming pool will affect your quote.
- The safety systems you offer: If your rental property has a gated entry, antiburglary systems and smoke alarms, you will see lower quotes than a landlord without these protective features on their property.
It is fairly typical for a landlord insurance policy on a single family home to be quoted at about 25 percent higher than a homeowners insurance policy for the same property. That's because of the additional risks landlords and rental properties face. Keep in mind, however, that most landlords set their rental rates with the additional expense of landlord insurance factored into the price.
Where Can I Find Landlord Insurance in Alaska?
If you are like most Alaska landlords, you have come to rely on the income your rental property provides. You want to protect that revenue and your investment property with an insurance policy made just for you.
Knowledgeable, independent insurance agents on the Trusted Choice® network are always available to answer your questions, suggest coverage options best suited for your property, and even assist you in filing a claim. These agents have years of experience working with Alaska insurance companies, enabling them to find a number of quotes with the best coverage options at the most affordable rates. Contact a Trusted Choice member agent near you to find out how you can obtain a landlord insurance policy that meets your needs and budget.