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Home insurance is essential for both the landlord and the tenant. Many people are often confused about how home insurance works for the landlord compared to how it works for the tenant. The bottom line is, the insurance cover, whether taken by a landlord or a tenant, is meant to cover the insured against any losses.
Insurance for The Landlord
If your landlord has picked out home insurance, it is mainly to cover his property against damage, but the insurance benefits you as the tenant in many ways. The insurance will cover the landlord against losses that might be caused by the tenant as well.
Let's first explore why a landlord needs to take out home insurance for a property that they've rented out.
First, renting out a property does not take away the ownership rights of the landlord. As such, it is in the best interest of the landlord that the property is covered against damages. The property could be damaged by fire, storms, or any other occurrence. The landlord would suffer the most loss under such circumstances.
Also, the landlord needs to ensure their property against losses that they might suffer as a result of the conduct of the tenant. They can insure their property against rent defaulters. Landlords can easily get duped by tenants. The process of evicting a non-compliant client can be long and expensive. The landlord cannot force the tenant to pay up and might end up losing money even when the client finally leaves. An insurance cover can help the landlord recoup such losses.
The insurance cover by the landlord will help the client as well. If the property gets damaged in any way, the tenant won't have to cover the repairs from their pocket. They won't have to wait for long before the repairs are done either.
Insurance for The Tenant
As a tenant, you can get insurance cover for your home as well. Under such circumstances, the protection only protects your belongings within the property. It does not cover anything that you do not have the right of ownership to. As mentioned above, a property can be damaged by anything from bad weather to accidents. Your valuable feature within the home can be damaged in the process.
A home insurance cover by the tenant does not cover the landlord or his property in any way. As such, home insurance premiums for the tenant tend to be lower than those of the landlord. However, the exact premiums are determined by the value of the property that is being insured.
There is another form of home insurance that can be taken by either the landlord of the tenant. That's an insurance cover for third-parties. That means that the insurance will compensate anyone who incurs losses as a result of any accident that happens within the property. For instance, if a fire starts in your home and causes damages in the neighbor's house, the neighbor will be compensated through such a cover. That will prevent you from being held liable. Also, if anyone gets injured within the property, they will be catered to by such a cover.