What is Landlord Insurance?

Property investing can be a lucrative side business or career, but it comes with certain risks no matter how you go about it. From potential building damage to possible liability lawsuits, landlords in Massachusetts need to protect themselves from many perils. Landlord insurance often plays an integral role in securing appropriate protection.

Landlord insurance is a specialized commercial insurance that’s designed to meet the risk mitigation needs of investment property owners. Because owners face multiple risks, most of these policies are package policies that contain several individual coverages within them.

What Massachusetts Property Investors Should Have Landlord Liability Insurance?

Most people and businesses that own investment properties in Massachusetts ought to carry landlord liability insurance. This includes both investors who live in-state and those who are located elsewhere, and it also includes investors of different property types. Landlord liability insurance is available for single-family homes, duplex homes, multi-unit residential buildings, mobile homes, commercial buildings, industrial buildings and more.

Additionally, investors normally need their own liability insurance regardless of whether they actively manage properties or outsource the work to a property manager. Should someone have a valid lawsuit, they’ll likely sue the property owner regardless of who’s ultimately responsible for the claim. Even simply defending such a lawsuit can be expensive, but insurance may help pay the associated legal fees.

Should Homeowners Have Landlord Liability Insurance When Renting a Room?

Homeowners who rent out one or more rooms within their primary residence should consult with an insurance agent who knows landlord liability insurance. This is a complex insurance situation, and whether a landlord liability policy is needed depends on the terms of the homeowners’ personal home insurance policy and the specifics of their renting situation. An insurance agent can help sort through these details.

Should Owners of Short-Term Rental Properties Have a Landlord Policy?

Offering short-term rentals presents another unique insurance situation, and property owners who do this will want to speak with an agent about how to best protect themselves. Depending on the specifics of a situation, coverage might be available through a homeowners, short-term rental or traditional landlord policy.

What Protections Are Available From Landlord Policies?

The exact protections that are found within a landlord policy can vary, but there are several coverages that many policies make available and landlords commonly consider. These include:

• Rent Guarantee Coverage, which might cover payments that tenants don’t make
• Loss of Income Coverage, which might cover other causes of reduced revenues
• Legal Assistance Coverage, which might cover legal costs associated with non-liability claims

Most policies also provide coverage for owned buildings and liability lawsuits. Building coverage normally encompasses a variety of incidents that could lead to property damage or destruction. Liability coverage normally extends to a large variety of incidents that could give rise to a liability suit, and the coverage usually helps with both legal fees and settlements in the event of a covered lawsuit.

How Much Do Landlord Policies Cost?

Landlord policies’ premiums are calculated based on many factors, and the best way to find out how much insuring a particular property or business will cost is to get specific quotes. An independent insurance agent can help get quotes from many insurance companies in the state. Some of the factors that commonly impact premiums are a property’s location, size, number of units, construction and secondary structures.

In most cases, landlord policies are quite affordable even though premiums do vary. Landlords can also often deduct their premiums when filing taxes, so long as the premiums are used only to insure an income property. (Because tax law change and differ, landlords should consult with a tax professional to confirm that their premiums are deductible.)

How Can Massachusetts Property Owners Get Landlord Insurance?

For help finding landlord insurance in Massachusetts, contact the independent insurance agents at Flavin & Flavin Insurance. Our agents can help you compare quotes from several insurance companies, and we have the expertise necessary to help you select whichever policy is most suitable for your needs.