Whether you are a first-time landlord, renting out your cabin in Sussex County, or a real estate mogul with multiple apartment buildings in the Dover metro area, it is important to secure a comprehensive and affordable landlord insurance policy to protect your considerable investment.
Before you search for landlord insurance quotes, however, there are several things to consider.
How Landlords Fare in Delaware
- The median gross rent that Delaware landlords charged their tenants in 2012 was $960, nearly $100 more than the national average.
- The vacancy rate in 2012 for Delaware rental properties was nearly 8 percent, a full percentage point higher than the national average.
- Although Delaware residents pay higher rent, it is still one percentage point lower as a fraction of income.
- Delaware has one of the lowest property tax rates in the nation, making investment and rental property ownership very appealing.
Why Is Landlord Insurance Important?
Chances are, you have a lot invested in your Delaware rental properties and have come to rely on the income they provide. Should a tenant sue you for unrepaired damages to the building, a delivery person slip and fall on your land, or a severe weather event destroy any of your properties, the financial impact could be devastating. Only the protection of a comprehensive landlord insurance policy will protect your savings from being raided to conduct the needed repairs or pay the costly legal fees.
What Is Landlord Insurance?
Landlord insurance provides coverage for property owners renting out one or more residential homes, apartments, or condos. As a landlord, you need protection from financial loss that may result from damages to a rental property due to fire, break-in, liability and more. You can even find insurance to help cover loss of income in the event that your rental units become uninhabitable due to circumstances beyond your control.
What Does Landlord Insurance Cover?
Landlord insurance provides a number of important types of coverage options. Depending on the Delaware insurance company you work with and the choices you make, your policy may consist of some or all of these types of protections:
- Property damage: This coverage helps pay to repair damage to your buildings and personal property due to fire, storm damage, 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 insurance: This coverage protects you from major costs stemming from liability claims and lawsuits. Whether a tenant, guest or even a burglar is injured on your rental property, you could find yourself in a legal battle. Your liability insurance will help you cover the costs associated with bodily injury claims on your property. These costs can include medical payments, funeral costs, legal fees, and judgment or settlement costs. You will also be covered if you, as the landlord, are found responsible for another person’s property damage.
- Loss of income: This insurance, unique to landlords, will 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.
- 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.
How Does Landlord Insurance Work?
To gain a better understanding of how the process of landlord insurance works, here are a few examples of when the various coverage options come into play:
Property insurance: Say a fire breaks out in the Delaware neighborhood in which your rental property is located and damages the exterior and interior of your building. This coverage is designed to pay to repair or replace the materials on your property.
Liability: In another example, let's imagine that a postal delivery person leans against a railing on your apartment's staircase that breaks free and the postal delivery person falls and is injured. You most likely have legal responsibility (liability) for that person's injury and treatment. Your liability insurance can not only cover the costs of his or her treatment, but also any court fees you may face.
Loss of income: Delaware is no stranger to severe weather events that can level a building. If your rental property is destroyed beyond livable conditions by a storm and you can no longer demand rent from your tenants, this insurance will help replace that income on which you have come to rely.
What Will My Landlord Insurance Quote Look Like?
One landlord insurance policy quote can vary considerably from another. The quotes you receive will depend on a number of factors. Most Delaware insurance companies take the following into consideration when calculating your quote:
- Your geographic location and any known risks in the area (high crime areas will have more expensive quotes than low-crime locations)
- The size of the structure
- 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
Some Delaware insurance providers offer discounts for eligible landlord insurance policies, such as those for installing safety equipment like sprinklers and burglar alarms. Be sure to ask your insurance agent if you qualify for any discounts when they quote you on a policy.
How Can I Find Landlord Insurance?
You know the importance of protecting your Delaware investment property with a comprehensive landlord insurance policy. Knowledgeable independent insurance agents on the Trusted Choice® network are always here to help answer any questions you may have about a specific policy, suggest coverage options, and even help you file a claim. Their years of experience in working with Delaware insurance companies enable our agents to find a number of quotes from a variety of providers, ensuring you only receive the most competitive rates.
Contact an agent in your area to find out how you can start renting your property with ease, knowing your investment is protected.