In short:
Yes, you need landlord insurance.
But what is it, and why do you need it?
Landlord insurance covers property owners renting out one or more residential homes, apartments, or condos. Landlording is risky business, and you’ll need protection from any, and all financial losses that occur as a result of fire, break-in, severe weather and other such damages to your rental property. Landlords in northern Virginia can also get insurance to help cover loss of income in the event that rental property becomes uninhabitable due to circumstances beyond your control.
What does landlord insurance cover?
Lots of things.
Depending on the type of coverage you select, your landlord insurance policy may cover:
- Property damage: This includes damage to your buildings and personal property due to fire, storm damage, theft, vandalism and tenant damage. In the event of total loss, a property damage policy should cover the replacement cost for your entire rental property.
- Liability: A liability policy will protect northern Virginia landlords against liability claims and lawsuits. Say a tenant or a visitor is injured on your property; without liability insurance coverage, you could find yourself in a financial mess, as well as a legal one. A liability policy will help cover the costs associated with bodily injury claims, including medical bills, funeral expenses, legal fees, and judgment or settlement costs.
- Loss of income: Some insurance policies will compensate landlords for rental income lost in the event of a property rendered uninhabitable due to a covered loss (e.g., storm or apartment fire).
Do you have to have landlord insurance in northern Virginia?
No. Landlord insurance is not required by law in Virginia, but as a landlord, you would be remiss to not have it. Some things (building fires, tropical storms, vandalism) just can’t be helped, and it’s important that you be prepared — unless, of course, you want to cover liability and expenses out of your own pocket.
Is landlord insurance tax deductible?
Yes, you can deduct landlord insurance premiums you pay on your rental property, including any landlord insurance policies on the building, contents and liability. Being a landlord is a business endeavor, and so your landlord insurance is considered a business expense.
Okay, but what about renters’ insurance? Can you require this of your tenants?
Although there is no federal or state law requiring tenants to have renters insurance, as a landlord it is fully within your legal rights to require this as part of the rental agreement. Stipulated in a rental agreement, this requirement must apply to every tenant. A landlord can also require that a tenant have a specific amount of insurance, provide proof of coverage and require that the tenant maintain the policy for the duration of a lease.
