Entrepreneurs

What is landlord insurance and why buy it?

This article was translated from our Spanish edition.

Opinions expressed by Entrepreneur contributors are their own.

Renting your house, apartment, warehouse or land can become an excellent option to obtain an extra income. In this context, having landlord insurance is essential for your peace of mind and the security of your assets.

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But what is landlord’s insurance?

It is a policy, which includes an extensive number of property protections, such as civil liability in the event of damage to third parties or tenants.

If you have insurance of this type, you could avoid financial losses due to any damage that occurs to your property or in the event that you are held responsible for damages to third parties due to an accident or loss.

How do these types of policies work?

According to Ahorraseguros.mx , a specialized insurance quote, the policy has additional coverage unlike ‘normal’ home insurance, although first we will mention that like these, it covers damages caused by accidents or natural phenomena such as:

  • Fires
  • Explosion
  • Floods
  • Earthquakes
  • Stole
  • Floods
  • Volcanic eruptions
  • Water leaks
  • Toxic gases
  • Falling objects or structures
  • Lightning
  • Hail and snow
  • Chemical spills
  • Vandalism.

The insurance covers damage to tenants or personnel working inside the property. In the same way, it protects the owner of the house in case the tenant does not fulfill his obligations or causes damage to the property.

Among the most outstanding coverage are:

  • Structural and cosmetic damage to the home
  • Theft or total loss of belongings in the property
  • Total damage or destruction caused by tenants
  • Breach of rent by the tenant
  • Refusal to evict the home and trespass
  • Abandonment of the property
  • Civil liability.

Why is it important to have landlord insurance?

According to the latest INEGI census, it is estimated that 29.9% of households in Mexico are not owned, but are for rent or are loaned by relatives.

According to specialists, it is the most recommended, especially if you want to have security and some support as an owner, since there are always risks that range from non-payment by tenants or, even, the refusal to vacate the property when prompted.

These processes can be quite time consuming and expensive. For this reason, having coverage that helps you pay for legal expenses and advises you in the event of any inconvenience to your property is very convenient.

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