The property protection in a landlord insurance policy typically helps cover physical property related to the home you're renting out. This may include the dwelling itself and equipment you keep on site to help maintain it. Coverage generally includes:
Dwelling Coverage:
- Helps pay to repair the rented home, condo, or apartment if it's damaged by covered perils like fire, lightning, wind, or hail.
Other Structures Coverage:
- Covers the cost to repair detached structures on the rental property, such as a garage or fence, if they are damaged by a covered loss.
Personal Property Coverage:
- Protects equipment you keep on-site to maintain the rental property, like a lawnmower or snow blower.
- Does not cover your personal belongings left at the rental property, such as a bike or DVD player.
All of these coverages are subject to the deductibles and limits specified in the landlord insurance policy. Deductibles are the amounts you pay out-of-pocket before the insurance coverage kicks in, while limits are the maximum amounts the policy will pay for a covered loss.
Landlords can typically customize their deductibles and limits for each type of coverage to fit their specific needs and budget. Working with an experienced insurance agent can help landlords design a comprehensive policy that adequately protects their rental property and assets.
Actual Cash Value Vs. Replacement Cost Value Policy:
Actual Cash Value:
Actual cash value insurance reimburses you for lost property with depreciation in mind. It looks at replacement cost and subtracts for the age and overall wear and tear of the property. As such, it is not likely to fully replace your home, vehicle, or other belongings. For instance, if your couch is damaged in a small house fire, actual cash value does not give you the full amount to replace the item.
Replacement Cost Value:
Replacement value insurance does not factor in depreciation. It pays to replace your property at full cost, minus your deductible. This means that you can replace your property with that of similar kind and quality to that which you lost.
For instance, if your covered television is stolen, replacement value insurance will pay the full price of a new one with similar specs. That said, going back to the “similar kind and quality” clause, it will not replace your television with one that is larger or has a higher resolution. This level of coverage is recommended for homeowners, at least for the primary dwelling.
