In the residential landlord-tenant context, many leases call upon the tenant to obtain insurance to cover against the loss of the tenant’s personal property. The landlord typically has general liability insurance to cover against casualties like fire, a falling tree, burglary or water damage, but that coverage only protects the building and not the building’s contents. This general insurance covers damages to the physical structure of the building, its equipment, and to personal injury resulting from a casualty, but not the tenant’s losses.

Landlord’s often overlook—or are simply unaware—that additional coverage exists to protect against damage to the landlord’s personal property and lost income resulting from a casualty. For example, if an event renders a home uninhabitable, the tenant would have the right to cancel the lease without penalty and find alternative housing, or the landlord maybe obligated to pay for such alternative housing. The landlord may also have provided a furnished apartment. Lost rent, the cost of providing the tenant with alternative housing, or damage to the landlord’s furniture is not covered by the general liability policy.

Landlord’s insurance, separate from the general liability insurance, covers such losses. If it takes a long time to rebuild a home, landlord’s insurance will cover the lost rent that otherwise would have been generated but for the damage. Such coverage would also replace damaged furniture owned by the landlord. This landlord’s insurance coverage does not cover costs associated with a tenant who simply stops paying rent; there needs to be an event that renders the leased premises damaged or uninhabitable. Many new landlords are unaware of this type of coverage, but even long-time landlords may be surprised to learn that they can protect against lost income in the event of a casualty by obtaining landlord’s insurance.

Landlords should contact their insurance carrier to determine the cost of landlord’s insurance coverage. It may be a small price to pay to ensure steady income in the event of a casualty that renders a tenant unable to occupy the rented space.