Landlord insurance is a specific policy that homeowners buy when they intend to rent out a property. It covers a range of incidents and factors such as liability claims, damage to the property, and loss of rental income, depending on certain circumstances. But there are also a number of situations where it does not come into play. Exact exemptions will depend on your individual circumstances, but here are a few of the standard situations that landlord insurance will not cover.
Wear and tear
Wear and tear is a kind of minor damage that is not intentional but occurs during the regular day-to-day usage of the property and happens gradually. For example, it could include minor scuffs and scrapes on the walls, worn carpets, faded curtains, or the slight wearing out of items like mattresses and sofas, depending on the length of the tenancy. Costs relating to these matters should always be borne by the landlord and are not covered by insurance.
Most countries specify that the tenant cannot be charged for such issues. For instances of intentional tenant damage, it is less clear-cut whether landlord insurance covers the costs. In situations where the tenant has caused any kind of structural or interior damage to the property and items within it with a sense of purpose or maliciousness, the costs are typically retrieved in other ways, not via insurance policies.
Many properties experience issues with mold – some chronically, and some just occasionally, depending on specific weather and environmental conditions. Neither condition is good as mold causes a massive inconvenience to tenants, including damaged belongings and potential health issues. Furthermore, it can be expensive and difficult to treat, involving ozone machines, re-painting, and even structural changes and improvements. As mold is a possible recurring situation, it is not covered by landlord insurance.
If your property suffers from building defects such as non-structural cracks, spalling of concrete, defective finishes, condensation, structural movement, or subsidence, you are not covered by your landlord’s insurance. There may be cases where they are covered by other forms of insurance, such as home insurance, but in the case of new builds, these issues are in the hands of the developers and constructors.
If your house gets struck by lightning or is caught in a tornado, your landlord’s insurance will not cover the damage. Your home insurance may cover this, but it depends on the exact type of event, as some ‘act of God’ situations are not covered.
If you cannot find a tenant for your property, the rental cost goes down, or the rental market suffers other setbacks, then your insurers are not responsible. These issues are not covered as they would increase the cost of premiums.
Last but not least, your landlord insurance will not cover the loss or damage of things belonging to your tenants. It is the responsibility of your tenants to have insurance for their belongings, should anything happen. Again, in some circumstances, your home insurance may cover these items, but this is not always the case and is certainly not a given.