Habitational Insurance For Rental Properties

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The Insurance Policies Needed for Landlords

Owning and renting out your properties can be a good financial investment. Protecting that investment is just as important. Habitational insurance is a type of business insurance that protects the property owner from various losses that can occur. Property owners with more than 4 rental units need to purchase habitational insurance. Here is all you need to know about this type of insurance and why it’s important. 

Habitational Insurance - The Craven Agency

What is Habitational Insurance?

Habitational insurance, also known as landlord insurance, is a specialized type of insurance coverage designed for property owners who lease residential buildings or multi-unit dwellings. It provides protection for landlords against various risks and liabilities associated with owning and renting out properties to tenants. Habitational insurance typically combines elements of property insurance, liability insurance, and loss of rental income coverage. 

Property Damage

One of the biggest reasons landlords should purchase habitational insurance is to protect their properties from potential damage. Accidents, natural disasters, and unforeseen events can occur, causing extensive harm to the structure, common areas, or individual units. With the right insurance coverage, landlords can lessen the financial burden of repairing or rebuilding damaged property, ensuring there is no disruption to their rental business. It is important to note, however, that this coverage will not cover the property of the tenants. The tenants would need to purchase a separate renter’s policy to cover that. 

Liability Coverage

In addition to property protection, habitational insurance offers landlords valuable liability coverage. Landlords can be held responsible for accidents or injuries that occur on their property. For instance, if a tenant or visitor gets injured due to a slip and fall accident, the landlord may be held liable. Habitational insurance provides liability coverage, helping landlords cover legal expenses, medical bills, and potential lawsuits arising from such incidents. 

Loss of Rental Income

Another significant benefit of habitational insurance is coverage for loss of rental income. In the event that property damage leaves units uninhabitable, landlords may face a loss in rental income while the units are being repaired. This can have a substantial financial impact. However, with habitational insurance, landlords can receive compensation for the lost rental income during the necessary repairs or renovations, allowing them to mitigate the financial strain and maintain their cash flow. 

Who Needs Habitational Insurance?

Anyone who rents their property should consider habitational insurance. Most insurance companies allow 1-3 unit rental properties to be insured under a personal dwelling fire policy with usually no more than one or two properties in total. However, 4 units and above or more than 2 rental properties are generally considered a commercial exposure and should be insured under a habitational insurance policy.

Habitational insurance is an essential policy for landlords as it helps mitigate financial risks associated with property damage, liability claims, and loss of rental income. It provides landlords with peace of mind knowing that they have protection in place to handle unforeseen events and potential legal disputes that may arise from renting out their properties. To learn more about this type of policy or to get a quote, contact us at The Craven Agency.

Contact The Craven Agency today! Serving Shreveport, Bossier City, Minden, Ruston, Monroe and the surrounding communities in Louisiana and the Ark-La-Tex regions.​


We'd love to talk through any of your business or personal needs and build the right insurance policy for you.

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