Whether you own a multi-story apartment complex in Phoenix or you simply rent out your second home in Flagstaff, you have specific liabilities and risks as a landlord. If you are new to the rental property scene or you are looking for a new insurance provider, the importance of securing a comprehensive landlord insurance policy in Arizona cannot be overstated. Before you search for landlord insurance quotes, however, there are several factors to keep in mind.
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Arizona Rental Statistics
According to census data:
- More than 10 percent of AZ residents rent their home or apartment.
- In urban centers such as Phoenix, more than 20 percent of residents rent.
- Nearly 40 percent of landlords rent out single-family dwellings, while a smaller percentage own apartment buildings and an even smaller number rent out mobile homes.
- More than half of all small-business owners in Arizona rent the structure in which their company operates.
What Is Landlord Insurance?
Landlord insurance provides coverage for property owners who rent out one or more residential homes, apartments, condos, mobile homes or commercial property. As a landlord, you need protection from financial loss that may result from damage to a rental property due to fire, break-in, severe weather and more. You can also find landlord insurance that covers the loss of income in the event that your rental units become uninhabitable due to circumstances beyond your control.
Are You Required To Carry Landlord Insurance?
Although AZ law does not mandate that you carry landlord insurance, It is required in some circumstances.
If you are still paying a mortgage or loan for a rental property, your lender may require that you carry insurance on it. Some landlords who lease their single-family dwelling to tenants rely on their homeowners insurance policy to cover their losses. However, most insurance companies will deny a claim if you did not notify them that the property was rented. In order to fully protect your income and assets, it's important to find a landlord insurance policy that meets your needs and will cover you in the event of renter damage, vandalism or severe weather events.
Why Is Landlord Insurance Important?
As a landlord or property manager, you are responsible for any damage caused to the structure of your property or any injury sustained by delivery personnel or guests in your property.
Should a tenant's guest slip and fall on your staircase, you could be subject to a high dollar lawsuit. Only a landlord insurance policy can help pay for your court costs and legal defense.
One severe weather event, such as a flash floods or fires that Arizona frequently experiences, could render your apartment unit or rental home uninhabitable. Not only does a good landlord insurance policy help you repair or rebuild after such events, but it can also help cover your loss of revenue while your tenants are not paying rent.
What Does Landlord Insurance Cover?
Most Arizona insurance providers will give you several options from which to choose as you build your landlord insurance policy, including the following:
- Property damage: This covers damage to your property and personal belongings due to fire, severe weather damage, theft, vandalism and tenant damage. Ideally, your landlord insurance will cover the replacement cost for your entire rental property in the event of a total loss.
- Liability insurance: This coverage protects you against liability claims and lawsuits. Liability insurance will help cover the costs associated with bodily injury claims on your property. These expenses may include medical payments, funeral costs, legal fees and judgment or settlement awards. You will also have coverage if you neglect to fix a leaking water pipe and water damage destroys a tenant’s property; the tenant could file a liability claim against you.
- Loss of income: This coverage will help reimburse 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. With this protection, loss of tenants does not mean loss of rental revenues.
Your landlord insurance policy does not cover the personal property your renters keep within your rental property. You may wish to advise your tenants to carry renters insurance as part of their lease agreement to cover their belongings in the event of a fire, severe weather, theft or vandalism.
What Are Landlord Insurance Quotes Like?
Most Arizona insurance providers take several factors into consideration when they calculate landlord insurance quotes.
Be sure to have the following information ready when you look for quotes:
- The location of your rental property (Apartments or homes in high crime areas will have higher quotes than those in low-crime neighborhoods.)
- The size of the structure
- How many rental units you have
- The age and condition of the property
- Whether your electrical wiring is up to code
- Whether your complex has a swimming pool
- The type and amount of coverage you are purchasing
You may get discounts on your landlord insurance quotes for the following reasons:
- You have fire alarms, extinguishers and sprinklers installed in your rental units.
- The complex has gated access.
- You have burglar alarms installed on the property.
- You prohibit renters from smoking inside the property.
You may see quotes as low as $500 per year for a small rental unit or several thousands of dollars per year for a larger complex with a swimming pool. If you rent out a single-family home, you may pay about 25 percent more for landlord insurance than you pay for homeowners insurance.
How To Find Landlord Insurance
The last thing you want to worry about as a severe weather event strikes your rental property is whether your insurance will cover the losses. Knowledgeable, independent insurance agents in the Trusted Choice® network are always available to answer your questions, suggest coverage options best suited for your rental property and even assist you in filing a claim.
Contact a Trusted Choice agent near you to find out how to properly protect your rental unit and your revenue with a landlord insurance policy that meets your needs and budget.