Maryland Landlord Insurance/Homeowners Insurance

• October 30, 2015
• Landlord Law

In September, the Maryland Association of Realtors reported about 32,000 homes were on the market in Maryland. That’s good news for buyers, because they can take their time shopping around for the perfect home. Sellers, on the other hand, may find their home is taking too long to sell – and some of those sellers will find themselves in the role of accidental landlord. The accidental landlord role is one borne of necessity. Instead of letting a home sit vacant, and potentially paying on two mortgages while waiting for one home to sell, some homeowners are leasing their slow-moving property to tenants. But landlords beware – without the right insurance policy, you could be jeopardizing your financial future.

Why You Need Landlord Insurance

When you first buy a home and get a homeowner’s policy, your insurer is offering to protect your investment based on the presumption that you are going to live there. So if you move out and lease your property to tenants, your insurer could deny any claims you might make, due to the fact that you’re using the property in a way not specified in your insurance policy. You may be able to add a provision to your current policy about rental property, or you may need an entirely new policy. Call your insurer before you start looking for tenants.

Protection from Injury Claims

A tenant living in your home, or a tenant’s guest, could sue you if they were to be injured in your home or on your property. Landlord insurance provides liability coverage, and insurers will generally offer legal counsel or reimbursement for legal fees for its clients that are subject to certain types of lawsuits. Of course, as a landlord, you’re obligated to make sure your home is habitable for tenants. Respond to maintenance requests as quickly as possible, so if you ever do need to defend yourself against a personal injury claim, you can show that you’ve made reasonable efforts to keep the home safe for occupants.

Fair Rental Value Coverage

If a fire, storm, or other catastrophe should render your home uninhabitable, you’ll need to make repairs – and in some cases, that could take months. A landlord’s insurance policy provides fair rental value coverage. That means that while the home is empty and being repaired, your policy pays you (typically up to one year) for the home’s fair rental value, so you won’t have to worry about loss of rental income.

Reducing Risk

When homeowners decide to rent their home to tenants, they often look for friends or family to fill that role. But no matter how close your relationship, you should make sure the landlord-tenant relationship is strictly professional, and that includes having tenants sign a lease agreement. Informal agreements can create bad blood between friends and family members, should the people you trust end up damaging your property or moving out early. A formal lease is a binding legal document that defines the rights and responsibilities of the tenant and landlord, including having a security deposit provision. A security deposit can be used at the end of the tenancy if tenants damage your property or move out early. Even when you have landlord’s insurance to pay for repairs, you may still be required to pay a deductible, and that’s a good use for a tenant’s security deposit. Lusk Law, LLC provides valuable assistance to landlords, helping to avoid litigation when possible and yet actively representing our clients in court when litigation is necessary. Our experienced attorneys have provided legal counsel and representation to landlords in Howard County, Baltimore County, Baltimore City, Frederick County, Carroll County, Washington County, Anne Arundel County, and other counties throughout Maryland. If a conflict does arise concerning issues with rental properties, Lusk Law, LLC is ready to assist property owners facing formal complaints or litigation. Investment property owners in Howard County, Frederick County, Baltimore County, Baltimore City, Carroll County, Washington County, and Anne Arundel County, and throughout Maryland can rely on us to handle residential or commercial landlord-tenant cases. With over a decade of experience in representing landlords, we’re ready to offer a consultation concerning your rights. Please call us at 443-535-9715 or fill out our contact form if you have any questions about this topic.