The Types of Insurance Landlords Must Have in Denver, Colorado

The Types of Insurance Landlords Must Have in Denver, Colorado

Denver is one of the hottest real estate markets in the state of Colorado. Landlords are reaping the benefits of sky-high monthly rent. For a 1-bedroom apartment, the median rent is nearly $1,800 per month.

With rent becoming increasingly expensive, landlords are exposed to some risk. Uncertain economic conditions and inflation are causing difficulty for renters.

Nationwide, more than 5 million households are behind on their rent. A loss of monthly income may put your personal financial security in peril.

The good news is that there are insurance policies designed to protect landlords. Read on to learn about the types of insurance landlords must have. Explore topics such as landlord insurance in Colorado and what kind of coverage you need.

What Risks Do Landlords Face?

Owning a major asset like a rental property carries significant risk. Carrying insurance helps mitigate this risk and protect your investment. Before diving into the different insurance types, it is important to understand these risks.

Economic conditions present a challenge for many landlords. If the economy is faltering, many tenants cannot afford their rent. This disrupts your revenue stream and creates potential for income loss.

If rent is too high in Denver, you may experience lengthy vacancies that also disrupt revenue streams. Some investors struggle to find tenants because their rental property is in an undesirable area.

Costly maintenance and repairs are inevitable when owning real estate. You cannot control whether the heater breaks or the roof starts leaking.

What Insurance Do Landlords Need in Denver, Colorado?

There are a few insurance types that you should take out to protect your investment. Continue reading for a brief description of each insurance type:

Liability Insurance

One risk involves a tenant suing the landlord for damages. Tenants have successfully sued their landlords for many reasons.

Wrongful evictions, unsafe living conditions, and a breach of quiet enjoyment are just a few examples. It is important to know that standard homeowner insurance does not cover tenants living in an investment property. You need legal protection in the event something goes wrong.

Landlord Contents Insurance

Many real estate properties come fully furnished. The property may include furniture, appliances, and other items that do not belong to the tenant.

Carrying landlord contents insurance covers you in case these items are stolen or destroyed. This is similar to renter's insurance, which covers the tenant's belongings. Without this insurance, you may be on the hook when a tenant's lease expires and they leave ruin behind.

Landlord Insurance

Landlord insurance is a comprehensive policy. It covers various different risks that a landlord is exposed to. Fires, theft, and vandalism are major items covered by landlord insurance.

Loss of income is another major component of landlord insurance. As a business owner, loss of income is the biggest risk to a real estate investor.

Liability insurance is also factored into a comprehensive policy. There are additional options that you can purchase for natural disasters and rent guarantee.

Your Guide to the Types of Insurance Landlords Must Have

You now have a basic understanding of Denver landlord insurance. Landlord insurance provides a comprehensive approach, however, you can piecemeal other types into your homeowner insurance policy.

If you are looking for more information on the types of insurance landlords must have, contact us today to speak with a property management professional.