Whether you are renting out your summer cabin, or you have several Bismarck high rise apartment complexes, being a landlord is a tough job. You open youself up to a host of liability risks when you rent out a living space in North Dakota, no matter how big or small. Only a landlord insurance policy can protect your finances and rental properties from those risks.
Before you search for landlord insurance, however, there are several factors to consider.
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How North Dakota Does Renting
According to market analysis, nearly 20 percent of ND residents rent their home or apartment. Since the beginning of the oil and natural gas boom in the state, however, those demographics are constantly shifting.
Due to these demands, North Dakota experiences one of the lowest rental vacancy rates in the nation. Landlords are struggling to keep up with the breakneck speed of increases in the need for rental housing. This has driven rental prices up significantly in the past several years. Being a landlord in ND has never been more profitable, but the increased traffic has also led to higher risks.
Why Is Landlord Insurance Important?
Experienced landlords know that even with the best tenant screening process available, renters are hard on your property. Any time you rent out an apartment or home, you should expect to deal with tenant damages and complaints.
As a landlord, you can't control who your tenants invite over as guests. One slip and fall could leave you in a legal mess. Only a landlord insurance policy can help protect your bank account and assets from being subject to high-dollar lawsuits and settlements.
Am I Required to Carry Landlord Insurance?
Although no state law requires you to obtain a landlord insurance policy to protect your investment property, you may be required to do so under certain circumstances. If you are still paying the mortgage or business loan used to obtain your rental property, your bank or lender may require you to carry landlord insurance before you can take on tenants.
Be aware that your homeowners insurance policy will not cover any tenant damage or related repairs if the lender was unaware that you rented out the residence. Always notify your financial institutions of your intentions on renting out your property, and be sure to fully protect yourself with landlord insurance.
What Does Landlord Insurance Cover?
Most insurance providers will give you several options from which to choose as you build your landlord policy, including:
- Liability coverage: This can help pay for the costs associated with injuries or personal property damage that may occur in your rental. It can also help pay for your court fees and attorney costs should you face a lawsuit stemming from an incident at your rental home or apartment complex.
- Property damage coverage: This can help pay for repairs to your investment property if it is damaged by tenants, severe weather, fire, theft, vandalism or any other covered event. Ideally, the amount of property damage you carry should be high enough to completely rebuild your home or apartment should it be totally destroyed by a tornado or fire.
- Loss of income coverage: This can help restore your income in case your rental property is no longer inhabitable due to fire, weather or other covered events and you cannot collect rent from your tenants. If you have come to financially rely on the revenues your rental property generates, this coverage is important.
- Additional coverage options: You should also consider obtaining coverage such as:
- Flood insurance if your property is located in a flood zone
- Contents coverage if you furnish your home or apartment with appliances or other items
- Umbrella insurance for an added layer of liability protection
Many other insurance coverage options may be worth considering as well. It's important to speak with an experienced insurance agent who can help identify your risks and suggest coverage options best suited for your situation
What Will My Landlord Insurance Quote Look Like?
Because landlord insurance covers everything from a single family home to a 100-unit apartment complex, estimating an average quote for a policy is difficult. North Dakota insurance companies take several factors into consideration as they calculate a landlord insurance quote, including:
- The size and value of the property
- How many rental units it contains
- The property's age and location
- Whether you have gated access, security devices and smoke alarms
- Whether your complex has a pool, fitness center or other liabilities
- How much coverage you need
Typically, a landlord insurance policy for a single family home will be about 25 percent more than a basic homeowners insurance policy for the same property. This reflects the increased risks associated with renters.
Do I Have to Cover My Tenant's Property?
The only time you, as a landlord, are responsible for covering damages to your renters' property is if the destruction was a result of negligence on your part. For example, if a pipe bursts in your rental unit and water destroys your tenant's TV, you could be held liable for the cost to repair or replace it. If you have landlord insurance, you can file a claim and your insurance company may pay for the damages.
Some North Dakota landlords require their tenants to carry renters insurance as part of their lease agreement. This can help you avoid having to file a claim on your policy in such a situation.
Where Can I Find Landlord Insurance?
You don't want to find out your homeowners insurance policy refuses to cover property damage caused by a renter after it's too late. Knowledgeable, independent insurance agents on the Trusted Choice® network are always available to answer your questions, suggest coverage options best suited for your situation, and even assist you in filing a claim.
These agents have years of experience working with North Dakota insurance providers, enabling them to find you a number of quotes with the best coverage at the most affordable rates. Contact a Trusted Choice member agent near you to find out how you can obtain the perfect landlord insurance policy that meets your needs and budget.