Landlord Insurance in Vermont

What is landlord insurance?

Investing in rental properties can be a profitable part-time or full-time plan, providing short-term cash flow and long-term appreciation. Renting out residential properties in Vermont comes with not insignificant risks, though. That’s why there’s landlord insurance.

Landlord insurance provides tailored coverages for residential investment properties. Policies normally can protect both the properties and the landlords that own them.

Which landlords in Vermont should have landlord liability insurance?

Most landlords in Vermont are strongly encouraged to have landlord liability insurance in place. Coverage can be crucial in protecting against financial losses resulting from accidents.

In addition to liability coverage, property coverages are also generally recommended and sometimes required. It’s common for lenders to require that financed properties be insured against damage. Even for properties that are owned outright, it’s still usually wise to insure the investment.

What types of properties do landlord policies cover?

Landlord policies are normally best suited for smaller rental properties, being those with under five units. Policies might be purchased for single-family homes, single condominiums units townhouses, duplexes, and multiplexes with up to four units.

Properties with five or more units often require different financing, and also a slightly different insurance policy. Mixed-use properties that include commercial and residential likewise usually require a different type of policy.

What coverages are available through landlord policies?

Landlord policies may include a variety of liability coverages and other protections. Landlord liability insurance protections primarily cover situations where a landlord could be sued for another’s injury. Other protections might insure the property or the landlord’s revenue. Some coverages that are commonly available include:

• Property Damage Insurance: Might protect the rental property itself from damage, and could also protect HVAC systems, appliances, furniture, and other items at the property.
• Legal Assistance Insurance: Might protect against the cost of legal fees not associated with liability lawsuits filed against the landlord. For instance, this may cover expenses for judgments or evictions.
• Loss of Rental Income Insurance: Might protect against the loss of income when a disaster makes a property unsafe.
• Rent Guarantee Insurance: Might protect against lost income due to tenants failing to pay their rent on time.
• General Landlord Liability Insurance: Might protect against lawsuits filed against the landlord. For instance, this may cover injuries that tenants or their visitors sustain on the property.
• Commercial Umbrella Insurance: Might provide an extra layer of protection, covering claims that exceed the limits of general landlord liability insurance.

Do landlord policies cover water damage?

Whether a landlord policy covers water damage depends on two factors. Almost no landlord policies cover flooding, although separate flood insurance usually can be purchased. Water damage from plumbing issues might be covered, depending on what protections are selected when getting a policy.

Would homeowners insurance cover liability lawsuits that tenants file?

Homeowners insurance typically doesn’t cover tenants’ liability lawsuits that they might file against landlords. Although homeowners policies often include personal liability coverage, the personal coverage typically doesn’t extend to investment properties.

For coverage against tenant-filed lawsuits, landlords should expect to get separate landlord liability coverage. 

Can a single landlord policy insure multiple rental properties?

Many insurance companies offer landlord policies that can cover more than one rental property. An insurance agent specializing in landlord policies will be able to assist with finding a suitable one.

Do landlord policies cover tenants’ personal possessions?

Landlord policies generally don’t cover tenants’ personal belongings. Tenants ought to be encouraged to obtain renters insurance, in order to protect their possessions and provide them with liability coverage.