Buying a rental investment in Florida is often a huge financial undertaking. As such, it makes sense to protect it at all costs. And this is where landlord insurance comes in!
Before renting out your Florida rental investment, you should ensure it is insured against certain perils.
These include wind and hail, fire and lighting, and water damage, which can severely destroy your investment. Luckily for you, Florida landlord insurance can help give you peace of mind against such possible eventualities. The following is a comprehensive guide on everything you should know in this regard.
What is Florida Landlord Insurance?
A landlord insurance policy is also referred to as rental property insurance. It is specifically designed to insure rental properties against certain perils. A standard policy covers the costs of damage to the structure and other liabilities that can arise during a tenancy. For example, unpaid rent that can result from the property becoming uninhabitable.
And just like many other states, Florida law doesn’t make landlord insurance mandatory for landlords. Advisedly, though, it should be a must-have for peace of mind and protection against possible property damage.
Is There Any Difference Between Landlord Insurance and Homeowners Insurance?
Yes, some similarities and differences exist! One difference is that homeowners insurance covers a personal dwelling. Landlord insurance, on the other hand, covers the structure of the building and any property the landlord owns on the premises. Such as, furniture or appliances that are part of the lease with the tenant.
It’s also important to note that a landlord insurance policy only applies where renters are involved. And while it covers the landlord’s property and belongings, it doesn’t cover those of the tenant. The tenant may require another policy – a renter’s insurance – to cover their own stuff.
What Does a Standard Landlord Insurance Policy Cover in Florida?
Typically, no two policies are ever going to be the same. That’s because the insurance policy will depend on your own specific needs. But generally speaking, the following is what to expect in a standard Florida landlord insurance package.
Property Structure
This includes the dwelling itself as well as any other associated property like utilities and furniture. Other structures that may be covered include an outdoor ADU, garden fence, and garage.
The extent of the coverage may, however, differ from one policy to the next and will all depend on the premiums you go for. Examples of insurable perils under this category of damage include fire, theft, storms, vandalism, and water damage.
Personal Belongings
As already aforementioned, a standard landlord insurance policy will also cover any personal belongings you have. This can include things like kitchen equipment, washing machines, furniture, and mattresses.
Liability Protection
As the landlord, you’d be held financially liable for any injuries that occur on the property. This can include bodily injury, property damage, and legal defense costs. And these can run into tens, if not hundreds, of thousands of dollars. Luckily for you, should you find yourself in such a situation, a landlord insurance policy can take care of it.
Extra Covers
Beyond the standard coverage, there are other extras you can add on top of the standard landlord insurance policy. You could add these if you feel the need to, especially if your property is located in a particular high-risk area.
- Flood insurance
- Legal liability insurance
- Malicious damage
- Loss of rental income
- Earthquake insurance
- Content insurance
- Renter’s living expenses if they have to move out due to a covered event that makes their unit uninhabitable
What Does a Florida Landlord Insurance Policy Not Cover?
While landlord insurance provides essential protection, it doesn’t cover everything. As a landlord, it’s important to understand these exclusions and communicate them to your tenants. Below are common items not covered by standard landlord insurance policies.
The Tenant’s Personal Belongings
Landlord insurance only covers the property and the landlord’s personal belongings, leaving tenants responsible for protecting their own items. Tenants should consider securing renter’s insurance to safeguard themselves against financial losses.
Renter’s insurance typically covers medical payments, personal property, and personal liability in the event of theft, vandalism, damage from power surges, or pet-related liabilities.
Repair or Replacement of Faulty Appliances or Equipment Malfunction
Although landlord insurance may cover damage caused by a faulty appliance or equipment malfunction, it does not cover the cost of repairing or replacing the item itself. These expenses fall entirely on the landlord.
Owner-Occupied Properties
Properties that are shared by the landlord and tenants are not covered under Florida landlord insurance policies. For such cases, landlords must purchase a homeowners insurance policy instead.
Renovation Costs
Standard landlord insurance does not usually include coverage for renovations. However, some insurance companies may cover specific upgrades, such as eco-friendly system improvements, if explicitly included in the policy.
How Much Does a Florida Landlord Insurance Policy Cost?
The specific cost will depend on a myriad of factors. Such factors include the property’s location, size, and value. On average, though, expect to pay about $2,400 for a Florida insurance policy annually.
Part of the reason for the high cost is because of the costly average home values which can be over $400,000. In addition to the costly home values, Florida is also prone to relatively more natural disasters.
These include wildfires, tornadoes, hurricanes, and flooding. It ranks among the top four states at the most risk of natural disasters. And the higher the risk, the higher the premiums will be!
Conclusion
Landlord insurance should be a must-have as a landlord in Florida. And make sure to shop around for the best value. For expert help in this regard or overall management of your Broward County rental property, look no further than TrueNest Property Management.
We can increase your rental income all while minimizing your stress! Get in touch to learn more!