Whether you own Little Rock apartment skyrise, or you rent out your second home in Fayetteville, Arkansas provides many rental opportunities. The importance of protecting your personal finances and your investment properties cannot be overstated. Landlords face all types of liability risks, and finding the proper insurance policy to protect yourself is vital.
Before you search for landlord insurance quotes, however, there are several factors to consider.
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How Arkansas Landlords Fare
There are more than 22 million landlords in the U.S., and many of them are located in Arkansas. According to market analysis:
- Slightly more than 30 percent of Arkansas residents rent or lease their home or apartment.
- Landlords in Pulaski County charge an average of $800 per month for a one-bedroom apartment.
- The average rent charged in Saline County, Arkansas, for a one-bedroom is around $650 per month.
- Many Arkansas landlords use their rental revenues as supplements to their main incomes.
Am I Required to Carry Landlord Insurance?
While Arkansas state law does not mandate it, if you are still paying a mortgage or loan for your rental property, your lender or financial institution may require you to carry landlord insurance. Also, if a tenant or guest damages your rental building or fixtures, your insurance company can deny your claim if they were unaware that renters were living there.
It's a good idea, to protect your interests and to avoid being subject to costly and frustrating legal proceedings, to carry landlord insurance on any rental property you own.
Why Is Landlord Insurance Important in Arkansas?
As most landlords are away, rental housing carries its own set of risks. Tenants, their guests and delivery people can file a lawsuit against property owners for any number of events. A landlord insurance policy can help pay for your legal defense and court fees, should you find yourself in this situation.
Additionally, most landlords try their hand at the rental business in order to make money. You will want to protect the financial investments you have made and have help available should disaster strike.
What Does Landlord Insurance Cover?
Landlord insurance provides several important types of coverage. Most Arkansas insurance companies should be able to offer you the following types of coverage options as you build your landlord insurance policy:
- Property damage coverage: This can help pay for repairs to your buildings and personal property due to fire, severe weather events, theft, vandalism and tenant damage. Ideally, your landlord insurance will cover the replacement costs for your entire rental property in the event of a total loss.
- Liability coverage: This option can help protect you against liability claims and lawsuits. Whether a tenant, visitor or even a burglar is injured on your rental property, you could find yourself facing a lawsuit. Your liability insurance will help you cover the costs associated with bodily injury claims on your property. This can also help protect you if you are found responsible for another person’s property damage. For example, if you fail to fix a leaking water pipe and mold damage destroys a tenant's personal belongings, a liability claim can be filed against you by the tenant.
- Loss of income: This coverage option 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, if you provide these things to your tenants.
It's always a good idea to speak with a qualified insurance agent to be thoroughly informed of all your insurance options.
Do I Have to Cover My Tenants' Property in AR?
Unless you are found liable for destroying your renters' property, your tenants are responsible for finding insurance policies that cover their own belongings.
Many landlords require their tenants to purchase renters insurance as part of their lease agreements. This can help you avoid liability disputes and ensure your renters are covered in the case of a catastrophic event such as a residential fire or tornado. It can also help you avoid having to file insurance claims on your own policies if your renters are covered under their own.
What Will My Landlord Insurance Quote Look Like?
Due to the fact that Arkansas landlords can have a single family home, or several, multi-unit apartment complexes, it is extremely difficult to determine an average quote for landlord insurance. Most Arkansas insurance providers take several factors into account when calculating your quote, including:
- Your location (rental units in high property crime areas will find higher quotes than those in more secure, lower crime neighborhoods)
- The value of the structure (more expensive homes and buildings will see higher quotes than those of less value)
- How many rental units you have
- The age and condition of the building
- Whether your electrical wiring is up to current code
- Whether you allow smokers to rent from you
- Whether your complex has a swimming pool
- The type and amount of coverage you are purchasing
- Whether you have fire sprinklers installed in your rental units
- Whether the complex has gated access
- Whether you have burglar alarms
Landlord insurance for a single family dwelling in Arkansas is typically 25 percent more than a homeowners insurance policy for the same structure, as renters pose increased risks to damage than homeowners.
Where Can I Find Landlord Insurance in AR?
No matter if you are a real estate mogul and have dozens of apartment complexes, or you own a single rental unit that supplements your traditional income, the protection of a landlord insurance policy is a must.
Knowledgeable, independent insurance agents in the Trusted Choice network are always available to answer your questions, suggest coverage options best suited for your rental unit, and even assist you in filing a claim. These agents have years of experience working with Arkansas insurance companies, enabling them to find you a number of quotes from a variety of providers, ensuring the quotes you see offer only the best coverage options at the most affordable rates. Contact a Trusted Choice agent near you to find out how you can obtain the perfect landlord insurance policy that meets your needs and budget.