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North Carolina is considered a landlord-friendly state thanks to its lack of rent control, streamlined eviction process, and no notice is required to enter the property. While many colleges make North Carolina a great property investment place, landlords must also consider natural disasters and risks that could damage your property. These could be crime rates in your selected area or increased tropical storms, floods, and hurricanes. You can prepare yourself for some risks, but others are not as predictable. So, having the right North Carolina landlord insurance on your investment property is vital to protect yourself.
Becoming a landlord can be overwhelming, especially for a first-time investor or someone new to North Carolina’s real-estate scene. TGS Insurance Agency is here to streamline the process for you. This will help you understand what landlord coverage is available in North Carolina—anything from coverage options to aspects that could impact your premium. However, you can contact one of our independent agents at any time or submit your information here for a free landlord insurance quote.
- Landlord insurance protects against sudden and accidental damage to your rental property.
- There are three types of landlord insurance forms- DP1, DP-2, and DP-3.
- Landlord insurance does not cover maintenance of your rental property.
Table of Contents
What Is Landlord Insurance?
Landlord insurance is also known as rental property insurance, dwelling fire coverage, or investment property insurance. This kind of insurance covers risks associated with having tenants for a long time at your property. Types of properties eligible for this kind of coverage are single- and multi-family homes, condos, and apartments that are not your primary residence. Within a North Carolina landlord insurance policy, you can get coverage for property damage, liability costs, and protection for landlords’ loss of income on the property.
Related Reading: Landlord Insurance versus Homeowners Insurance
What Does North Carolina Landlord Insurance Cover?
There are three main things that your landlord insurance policy will cover for your rental property.
Property Damage: This is similar to dwelling coverage included in your homeowners policy. Property damage covers damage to your rental property’s structure caused by covered perils.
Liability Coverage: In a landlord policy, this kind of coverage protects you, as a landlord, legally if someone is injured on your property. If the injured party sues you, it can help cover legal and court fees and medical care costs.
Loss of Rental Income Coverage: Say a covered peril damages your rental property and becomes unlivable. Your landlord insurance policy may reimburse you for your loss of rental income.
What is Not Covered by Landlord Insurance?
Landlord insurance is a way for owners to rent out their properties safely. Its main priority is to cover unpredictable losses, but it only covers some things. Below is a list of claims usually not covered by landlord insurance.
Maintenance and Repairs
Suppose an appliance stops working, like an oven or dishwasher. In that case, landlord insurance will not cover repairs or purchasing a new appliance.
Damage from Tenants
Landowner insurance only sometimes covers irresponsible tenants who neglect to take care of your rental property properly. Property owners might consider taking extra protection to get this coverage.
Renter’s Personal Property
Landlord insurance will not cover your tenants’ personal property unless the damage results from your negligence as a landlord. We recommend that landlords require their tenants to obtain their own renters insurance for themselves and, of course, the tenant.
Related Reading: Landlord Insurance vs. Renters Insurance
As with the case of a typical homeowners policy, a flood insurance policy needs to be purchased. Having a flood policy ensures that insurance covers flooding. TGS recommends it even if your investment property is not in a flood zone!
How to Pick the Right North Carolina Landlord Insurance
Understanding different forms of landlord policies and coverage options that distinguish landlord insurance policies will help you make the right decision. Insurers might have varying carrier titles to describe their policies, so it is essential to understand what each type of DP policy covers.
Dwelling Policy 1
A DP-1 policy is the most simple and limited landlord insurance policy for rental properties. The DP-1 policy is a “named-perils” policy, which only protects against perils that are specifically named in the policy form; typically, there are only ten named perils in this policy.
Dwelling Policy 2
A DP-2 policy offers more coverage than a DP-1 policy but less than a DP-3. It is considered moderate coverage for landlords and covers all of the “named perils” covered by a DP-1 policy plus additional events. The most significant difference from a DP-1 policy is that it pays replacement cost value on property damage rather than ACV or actual cash value.
Related Reading: Actual Cash Value vs. Replacement Cost Value
Dwelling Policy 3
A DP-3 policy offers the most coverage for landlords and is the most common landlord insurance policy. This “open peril” policy provides coverage from all events not explicitly listed on the policy. It offers the broadest protection of the three types of landlord insurance. A DP-3 policy pays out the replacement cost on claims.
What Is The Cost of Landlord Insurance?
Typically, landlord insurance costs about 25% more than your average homeowners policy because rental properties have a higher statistical occurrence of claims than primary properties. The average premium can vary enormously for landlords depending on several elements, including:
- Property Type and Size
- Policy Type
- Condition of the Property
- Rental Prices
Buying the Right Landlord Insurance
Finding the best landlord policy that fits your property is an important step in protecting yourself and the people and things you love most, but finding the right carrier is equally important. TGS Insurance has been helping North Carolinians save on their landlord insurance and provides our customers with over 55 top-rated insurance providers that protect and save customers each day. You can even bundle your landlord with other coverages to increase the money you save every month. Get started today by contacting TGS Insurance.
Landlord Insurance FAQS
No, landlord insurance is not required by the state of North Carolina. Though it is optional, we advise that you have some sort of coverage. If you have none, then you can be stuck paying damages that could financially hurt you.
No federal or state laws require tenants to acquire renters insurance, but you can require it as the property owner. You must apply this to every tenant if it is in your agreement. Landlords can also require that their tenant has a specified amount of insurance and provide proof.
No, if an appliance breaks in your rental property, your landlord insurance will not cover it. Though, if you experience a burglary and an appliance is taken, the stolen item would be covered.