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New York State has one of the most desirable locations for rental property in the country- but NYC is not the only attraction.
It may not be one of the most landlord-friendly states, but there is always a demand for high-quality rentals from a good property manager.
You need New York Landlord insurance to protect those properties and shield your investment from sudden financial hardship.
This quick guide to landlord insurance in New York covers everything you need to know and explains why it is such an important part of running a successful rental property business in the Empire State.
Average Rental Prices and Landlord Insurance Costs in the US
Nationwide, the rental market is in a strong position. The average cost of rent has increased from around $1,400 to almost $2,000 per month.
Of course, these figures are not clear representations of what your property may cost, as the range of units available and the many factors that go into pricing them make prices vastly different.
By the same standard, looking at the average cost of landlord insurance in the US does not provide a clear picture of what an insurance company will charge you. The average for the nation, as a whole, is around $2,100 per year, but this is little more than a very rough guideline.
What Is New York Landlord Insurance?
New York landlord insurance helps protect rental property owners from financial losses caused by sudden damage. It is tailored to landlords and property managers, so there are certain inclusions that make it stand out from a standard policy for home insurance.
There is no law in New York that makes landlord insurance mandatory, but that doesn't mean it is not essential. Without it, you have no financial safety net if disaster strikes. It is also required by most mortgage lenders in the state.
Landlord Insurance or Homeowners Insurance?
People often confuse landlord insurance and homeowners insurance, but the difference is fairly simple.
If you own property but someone else lives in it, you need landlord insurance cover. People who live in their own properties can use a homeowners insurance policy instead.
Landlord insurance coverage includes a few extras you don't get in a standard homeowner's policy, including additional coverage for liability and lost rent. It is also usually a little more expensive.
What Is Included in a New York Landlord Insurance Policy?
A New York landlord insurance policy covers the same categories as most states.
- Dwelling coverage: Replacement cost for rebuilding or restoring your property's structure after significant damage caused by a covered event
- Additional structures: Pay to repair structural damage to garages, fences, outhouses, etc.
- Liability coverage: Legal costs and medical bills if a tenant is injured and you are liable as the property owner
- Personal property: Cover for anything in your rental properties that belongs to you
- Lost rental income: Include coverage in case you can't collect rent because of serious damages
Some other things that may be included or offered as optional extras include water damage insurance for frozen or backed-up pipes, flooding insurance, and legal liability coverage.
What Is Not Covered by Landlord Insurance in NY?
Your tenant's property is not covered by your landlord insurance policy. If your renter's personal property is damaged, they need their own policy. They should purchase renters insurance. Many landlords require renters insurance as part of the lease agreement.
Any damage caused intentionally or maliciously by your tenants is also not a covered loss. Unless you can resolve it amicably, you may need to file a lawsuit to recover the expenses.
Lastly, landlord insurance does not cover appliance breakdowns that happen due to general wear and tear. Old things break, and it is you are responsible for replacing them.
When Does Rental Property Insurance Help New York Landlords?
There are many examples of times when having landlord insurance makes a difference to New York landlords. Here are just a few.
- When severe weather damages your roof, and you need to rebuild
- Covering lost rental income if your property is damaged to the point it becomes uninhabitable
- Paying to replace items stolen in a break-in (as long as they belong to you)
- Legal fees and medical expenses paid when you are liable for injuries sustained on your property
How Much Does a New York Landlord Insurance Policy Cost?
New York landlord insurance cover costs vary drastically, mostly because of how many high-value rental properties there are in NYC compared to far more affordable areas.
Overall, the average annual cost of landlord insurance in New York State is around $1,700- but this does not show a clear picture of what to expect.
How Do Providers Calculate the Cost of Landlord Insurance in New York?
Insurance companies calculate landlord policy costs based on how much coverage is needed and how high the risk is to them.
Coverage levels are based on the size, value, contents, age, and condition of the property- as well as the specific needs of a client.
Rates are adjusted based on the likelihood of a claim being made, the policyholder's credit and claim history, and how high or low the deductible amount is.
Ways to Reduce Your Monthly Landlord Insurance Rates
You could be able to reduce your landlord insurance cost without reducing your coverage. Here are a few ways to potentially save money on landlord insurance policies in New York.
Be Well Prepared for the Property Inspection
Whenever a rental property owner asks for a landlord insurance quote, the insurance broker needs to carry out an inspection before finalizing the price.
This inspection determines the condition, value, and risk factors of the property and will directly impact any landlord insurance quotes given.
The better prepared you are for this inspection, the more chance you have of securing a good rate.
Make sure everything is up to building and safety codes, resolve any mold or rot issues beforehand, and look for anything else the insurance company may see as an additional risk.
Consider Investing in New Appliances and Property Repairs
In addition to the first point, it could be worth investing in upgraded appliances- or at least doing a good bit of maintenance.
The same applies to structural elements. You could earn a discount on your insurance if you have a new roof built using storm-resistant materials.
Make Security and Safety Features a Priority
One of the biggest risks for landlords in the Big Apple is property crime. Theft, vandalism, and break-ins happen, and it is something insurance companies want to cover themselves for.
Many insurance companies give lower rates to property owners with safety and security features installed. Alarm systems, video doorbells, and other anti-crime measures could all help earn your lower premiums.
Screen Your Tenants Effectively
Another way to reduce the risk factor and gain more favorable landlord insurance rates is to screen your tenants using DoorLoop. This may not automatically reduce your premiums (also, some insurance companies do look favorably on landlords with screening processes in place), but it lowers your likelihood of having to make certain types of claims.
Your rates usually drop if you keep a clean claims history, so anything you can do to mitigate risk is worthwhile.
Look Into Deals and Discounts Offered By Different Providers
Every insurance company has its own set of discounts, and it is worth comparing a few to see where you have the most luck.
Some possible discounts include no-claims bonuses, bundling deals, special rates for new builds, and lower premiums if you pay annually.
Raise Your Deductibles
Having a higher deductible means you pay less for your premiums, but you need to pay more out-of-pocket if you make a claim.
The Best Landlord Insurance Companies in New York: Five Top Picks
If you are looking for insurance quotes for landlord coverage in New York, there are plenty of companies to choose from. Here are five of the best landlord insurance providers operating in the Empire State.
You can get a free landlord insurance quote online from most providers, although some require an appointment with an insurance agent instead.
Remember- the first quote may not be entirely accurate- the property inspection can change things. Always compare insurance coverages and prices from more than one insurance provider before picking a landlord policy.
Where Does DoorLoop Come In?
Landlord insurance protects your rental property business from financial loss, but DoorLoop helps you run it efficiently and successfully every day.
This comprehensive property management software offers a complete solution for landlords who want more from their businesses- and a convenient way to handle daily tasks time efficiently.
Whether you manage one property of a state-wide portfolio, DoorLoop's features improve your system and make your job easier.
Here are some of the ways it can benefit your business.
- Manage maintenance requests online to reduce the number of calls, texts, and emails coming your way.
- Send automated payment reminders and collect rent digitally.
- Create a customized application website for prospective renters.
- Market your properties easily through Zillow and Trulia.
- Keep track of your units- including vacancies, lease contracts, maintenance needs, and more.
- Provide a tenant portal for your renters to improve communications.
- Handle all your accounting and finance needs.
This is just the beginning- learn more using the free DoorLoop demo. Schedule yours today!
Summary
People will always want to move to New York, and landlords across the state are in a great position. To protect that position, they need landlord insurance. It may not be required by law, but it is a vital part of the rental property business.
Compare policies and look for a policy that provides you with peace of mind. The cheapest landlord insurance policy is not usually the best, so try to find the balance between affordable rates and sufficient coverage.
DoorLoop can help take your New York rental property business up a notch, so get your free demo today and see the difference it can make first-hand.
Frequently Asked Quesitons
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