If you own real estate, you’re probably familiar with homeowners insurance. However, if you use your real estate for rental purposes, you’ll need a different kind of policy. Landlord insurance provides the type of coverage and security that rental property owners need in their particular situation. Here are three reasons to purchase a policy. 

The Benefits of Landlord Insurance 

1. Liability

Homeowners insurance includes liability coverage, which protects you if someone is injured on your property. Since tenants live on the premises long-term, there is more of a likelihood of accidents  putting you at a more substantial risk of being responsible financially. Landlord insurance typically carries higher liability limits compared to traditional homeowners policies. The liability coverage can pay for costs such as lawyer fees, medical payments, and judgment or settlement amounts. This type of policy can also have you covered if you’re found responsible for damaging a tenant’s property through a lack of action—such as when a leaky pipe results in flood damage to their belongings.

2. Loss of Rental Income

As a landlord, damage to your property can mean a loss of income. Landlord insurance may offer financial support to help you get by as you repair the dwelling. For example, if a damage occurs to the building enough to where the tenants have to move out, the policy will reimburse you for all or part of the lost rental payments depending on your policy. Similarly, loss of use coverage can help the tenant find temporary accommodation while the unit is being repaired. 

3. Property Protection

Part of the reason homeowners insurance can be so expensive is it covers personal property, such as furniture and clothes. As a landlord, you likely don’t have your personal items in your rental property. A landlord insurance policy provides a more affordable option to protect your real-estate, while your tenant is responsible for purchasing renter’s insurance to cover their belongings. Rental property protection can also help pay for repairs of your accommodation if a fire or another covered accident damages it.

By following these suggestions, you may be able to avoid damages that could result in a large insurance claim. For more information on protecting your property, get in touch with the team at Farmers Mutual of Tennessee. Since 1913, they have provided quality insurance coverage at an affordable price to residents throughout the state of Tennessee. Their local independent agent will be happy to help you find the right coverage for your home, mobile home, rental dwelling, or farm at a price that suits your budget. Give Farmers Mutual of Tennessee a call today at (800) 824-9555, and visit them online for more information.