Landlord insurance (aka Non-owner occupied insurance), is a policy with coverage for homeowners for them to protect of their property that is to be used as their investment. Basically, an insurance of your investment!

The 3 types of Landlord Property Insurance policies

• Basic Dwelling Property insurance / Dwelling-fire Form 1 (DP-1)
• Broad Dwelling Property insurance / Dwelling-fire form 2 (DP-2)
• Special Dwelling Property insurance / Dwelling-fire form 3 (DP-3)

To be specific, DP-3 is basically the most comprehensive, and it slides downwards in terms of coverage, the reimbursement offers and prices of its premium of course. So which should you choose? It’s entirely yours to decide, my dear readers.

Terms used in Landlord property insurance policies

The Landlord policies commonly consist of 5 (five) kinds of coverages terms:

• Dwelling coverage: Protects your property against accidents, natural disasters and thefts.
• Other structures coverage: Protects detached structures like garages and sheds.
• Personal liability and medical payments: Covers medical payments in undesirable scenarios whereby your tenant or guest was hurt within your property, resulting in a lawsuit against you, because of bodily injury(s) caused during the unforeseen circumstance. This liability clause also helps tenants be reimbursed for damages done to their personal items/merchandisers instead of bleeding directly from landlord’s pocket. i.e. a lack of proper repairs that led to plumbing leakage to the entire house, can be covered by the liability clauses from your insurance to settle your legal fees and settlement fees.
• Loss of rental income: Also known as rental reimbursement or fair rental value. Protects your rental income business from loss of rent if your tenants would need to vacate and be put in a hotel for that couple of days that you need to have your property rectified in the interim.
• Personal property coverage: Protects your personal property equipments that you have included with your tenant (i.e. Washing machine, iron, oven) . i.e. An appliance got caught in a fire that causes some damages. Additionally, you can schedule certain items on your policy to ensure reimbursement if they are destroyed.

Type of reimbursement/remuneration offered from these policies

DP-1 policies are Actual Cash Value (ACV) policies. i.e. In the event of a loss, the insurer will reimburse landlords for the depreciated value of your property.

DP-2 and DP-3 policies are Replacement Cost Value (RCV) policies, i.e. insurer reimburses landlords for the full cost of replacing your property. Hence, more expensive as well.

What exactly do DP Property insurance policies cover?

Do note that for DP-1 and DP-2 policies, they are termed as Named Peril policies (This means their coverage only covers whatever that is indicated in their policy.)

In short, some DP-1 policies only cover damage from fire, while you would expect a much comprehensive form of damages coverage from DP-2 policies; which includes hail, wind, falling objects, flooding from damaged plumbing, etc.

DP-3 landlord insurance policies on the other hand, are an open peril policy, (So all causes of damage are covered except those specifically excluded in the policy).

Lastly, Your Bonus PropertyWiki Tip!

All landlord policies generally excludes flood & earthquake damages (hence, you’ll need separate flood/earthquake rider insurance policies for that). There are even situations of intentional tenant damage rider coverage!

Always do have an in-depth review your policy with your insurance agents for your requirements!

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