Renting out your basement is a great way to cut down on the amount you pay on your mortgage, or even eliminate it entirely if you live in a desirable enough area and you build out your basement. However, a standard homeowners insurance policy does not typically cover renters, even when you’re occupying the same building. If anything happens to the basement, such as flood or fire damage, the insurance company may refuse your claim or cancel your policy entirely.
You need a landlord insurance policy which covers property damage for the part of the home that’s getting rented, coverage for natural disasters, and other claims that occur due to renting out property. This commercial insurance package may bring down the cost of your homeowners insurance if you get it through the same company you already have a policy with. You may also want to pursue other commercial insurance policies if you are getting into the landlord business instead of simply renting out spare rooms in your home. This way, you already have experience with commercial landlord insurance before you pick up additional properties.
Another advantage to picking up landlord’s insurance is income protection in case a natural disaster or a problematic tenant causes enough damage to a property that it cannot be rented out for up to a year. You receive the fair market rent payment for the apartment until its ready to get rented out again. Landlord’s insurance also provides financial protection against litigation by a tenant.
Talk to your local independent agent based out of Woodstock, GA to find out what landlord insurance packages provide you with the protection you need
