Your rental property insurance quote is just a click away! We insure rental homes, houses, apartments, four-plex and duplexes for landlord owners in Minnesota.
What is Rental Property Insurance?
It is important for any landlord especially when operating in Minnesota to be aware of legal and lawful standards and practices on housing codes and ordinances and how you will be able to interact with renters. As for the first aspect, it is understandable because the law does mention these aspects, but when it comes to your insurance it is not that obvious. This guide will also explain why standard homeowners insurance is not enough when your home is used as a rental property and why you will need what is known as landlord insurance or rental property insurance.
Householding insurance is a kind of insurance that is suited to the house or property that is let out to tenants. As distinguished from homeowners insurance that insures houses for residents, rental property insurance insures houses under the risk of tenancy. This insurance mostly concerns properties, torts, and loss of rental revenues most of the time.
Is Rental Property Coverage Required in Minnesota?
In Minnesota, it is not legally required for landlords to take an insurance policy on the rental properties though, ideally, it is recommended by mortgage lenders to secure their investment on the property.
Generally, when a person is taking a mortgage he/she is required by the lenders to have insurance on the property of their residence. In addition, it is crucial to comprehend that homeowners’ insurance does not apply to renting homes, and the landlords are on their own to secure landlord insurance.
Lack of coverage may lead to being placed in force coverage by the lender, and such coverage is relatively expensive and provides minimal security. However, it is highly recommended to keep landlord insurance even when there is no mortgage, for a legal reason of unforeseen damages.
Cost of Rental Property Coverage
For a property worth $200,000 in Minnesota, the costs of landlord insurance are approximately $1990 per annum. The average annual cost also increases to around $2140 consequently for a $250,000 house. These figures are guidelines that can help you plan for the insurance of your property.
Landlord insurance costs are also higher than homeowners insurance about 15% to 25%. These risks affect the additional costs or losses one is likely to incur for renting out a home, for example, loss from tenant’s damage or higher legal responsibility. These higher rates enable the company to factor in the different coverage requirements and the general risks that are associated with home-sharing.
Factors Influencing Cost
Carriers have tiny differences when it comes to underwriting – it is the method, which insurance firms employ when coming up with tariffs for the policies. Here are some of the most significant factors that providers consider when determining the cost of landlord insurance in Minnesota:
- Dwelling Age and Components: Claims arise where more problems are old, constructions as opposed to modern constructions, which conform to existing legal bonds and premiums.
- Property Size: Houses with larger floor areas as well as dwellings call for higher coverage, and thus are charged higher premiums compared to compact units.
- Construction Style: Fire and wind, which knock down wooden houses, do not affect masonry structures (brick or concrete) as much, thus insurance premiums differ.
- Claims History: Claims History: In this case, if a company has a history of opening several claims in the past, the insurance amount can be increased.
- Location: Structures in regions that have disasters such as floods, twisters, or higher crime rates may attract higher premiums.
What Does Rental Property Coverage (Insurance) Cover?
Dwelling
Dwelling coverage offers value protection over the actual rental property you have the insurance on. These can be the roof, building façade, floor, kitchen countertops, exterior patios, pipes, electrical and other systems that are part of the building. In other words, if the actual main physical house that you are renting out is destroyed from the events covered then the dwelling cost will assist in the costs of repair of the house or reconstruction cost.
- Other Structures
It pays for damages to fixtures and other structures on your rental property that are not permanently fixed to the main building. If the other structure is affected by a covered event, then the coverage will assist in paying for the fix or replacement. Common examples include:
- Driveways
- Pools
- Fences
- Detached garages
- Sheds
- Personal Belongings Coverage
Personal property coverage is useful when you have belongings within your rental premises for purposes such as mowing the lawn or for work-related equipment. It will also offer insurance for these items protecting them from harm. However, as with all of the renters’ insurance policies, this coverage does not include possessions of the renters or the tenants. They will be required by the renter’s insurance to help cater for their items in case of losses.
- Landlord Liability Coverage
It may be useful to consider landlord liability coverage simply because it shields you against legal and medical expenses if a tenant and/or his/her visitor gets hurt at the premises and decides to sue you. They distinguish vehicular coverage as that which can help provide for Medical bills, Legal fees and Settlement costs.
It covers you in a situation where the law holds you legally responsible for the person injured, you do not incur a huge financial loss due to expenses.
- Loss of Income Coverage
Rental income protection, or loss of income coverage, will help reimburse your lost rent if the property is rendered uninhabitable because of some event that is covered. For instance, if the occupants of the rented space have to vacate due to fire, or storm, to allow for repair of the structure, this policy will cover for the loss of revenue. This ensures that you continue having income coming in despite the current state of your property, say if it is under reconstruction.
Types of Rental Property Coverage in Minnesota
Being insured in Minnesota is accessible for landlords who have assorted approaches to choose from based on the type of house they possess. Common types of rental properties include:
- Single-family dwellings
- Duplex, fourplex, and any other multi-family dwelling that is not considered a single-family home is allowed.
- Apartments
- Condos
Both types can be categorized under various landlord insurance policies in which each of them provides a different level of coverage. Here’s an overview of the main types of rental property insurance available in Minnesota:
DP-1 Insurance Policy in Minnesota
DP-1 means an insurance policy for a basic rental property in Minnesota and pays the amount at actual cash value less depreciation. They include nine distinct kinds, namely wind, and fire The policy also includes nine types of perils such as wind and fire.
DP-2 Insurance Policy in Minnesota
DP-2 policies in Minnesota provide broader coverage than DP-1, which cover almost 18 perils such as theft, vandalism, water damage, and falling objects such as trees.
DP-3 Insurance Policy in Minnesota
The Minnesota DP-3 insurance policies provide large amounts of coverage for the perils and provide reimbursement for losses based on replacement costs. Not all properties can be applied due to having high qualifications that would be met.
Ways to get the Best Minnesota Rental Property Insurance Coverage
When trying to get the right rental property insurance in MN, consider the following steps:
Evaluating their individual needs and facilities where they can get affordable insurance policies. Small details concerning the location of your property, the number of units and whether you are a live-in landlord or an out-of-state landlord should be given due consideration.
Don’t forget to add your fundamental protections like liability and lost income, and delete other areas that may prove too expensive. There are ways additional protection such as higher policy limits and broad peril coverage may be contained in policies for out-of-state landlords.
Get insurance at a cheaper price by investing in features that would most likely lower insurance premiums or by seeking the most comprehensive insurance packages offered. To be certain, comparing the rates of multiple insurance companies will help determine the best coverage level for rental properties at the lowest cost.
How do you get a Quote for Rental Property Coverage in Minnesota?
It is recommended to collect several quotes while looking for rental property insurance in Minnesota so that you can get the best policy at an appropriate price. Here’s how you can efficiently navigate this process:
First, do not jump to the first solution you come across. When you get quotes from multiple Minnesota landlord insurance companies, you can liaise between the cheap quotes and the coverage being offered before arriving at the right insurance policy.
For that reason, if you need free advice, it is wise to consult an independent agent. Our online quoting engine allows Minnesotan landlords to select policies from some of the best landlord insurance companies. Also, our licensed agents working during business hours are always available to assist in getting the right coverage.
You can contact us directly on 952-222-8073 for further assistance or drop a mail to info@insuringminnesota.com. We have come to assist you in getting the desired landlord insurance in Minnesota. Thus, by using these resources, you can confidently select the insurance measures to protect your rental property investment successfully.
