Updated: June 2016
If you're a landlord, you may rely upon rent from your tenants to help you make mortgage payments or provide you with regular income. But what happens if your home unexpectedly becomes uninhabitable and your renters are forced to move out?
That's where landlord insurance may help. Fair rental income protection is part of a landlord policy. It may help replace the payments you would have received from your tenants — usually for up to 12 months, if needed — while the property you were renting out is being repaired after a covered loss. Depending on your insurer, this coverage may come standard with your policy or may be available as an add-on to a base policy.
Suppose your tenants are unable to live in your property after it sustains fire or smoke damage, for instance. In situations like this, fair rental income protection may help replace the rent checks you would have received. Check your policy to find out what types of situations it may cover.
It's important to know that rental income protection generally will not help if your tenant breaks a lease or your property is unoccupied between tenants.
Fair rental income protection doesn't cover damage to your property. However, most landlord insurance policies include dwelling coverage
to help protect the residence if it is damaged by certain perils, such as fire, lightning and wind. This coverage may help pay to repair or replace the structure — up to the limits stated in your policy — if it is damaged by a covered loss.
Be sure to read your landlord policy carefully to make sure you understand what types of situations it may and may not cover.
A local agent can help answer any questions about landlord insurance so you can choose the policy that fits your needs. Then, you can move forward with the peace of mind that comes with knowing you have a safety net in place for your property and rental income should the unexpected occur.