Landlords Insurance

• Rather than continue to pay for homeowners insurance, which covers the contents of your home as well as the property itself, landlords usually carry landlord's insurance, which is generally cheaper than a full homeowners policy. Landlords insurance covers the building and grounds in case of burglary, vandalism, fire and some storm damage, according to legal website Nolo.com. Comprehensive general liability, CGL, policies cover landlords' liability in case, as a result of poor conditions, someone is injured on a rental property. It also covers the cost of defending the landlord in a related lawsuit.
  
  

Natural Disasters

• Landlords insurance does not cover natural disasters such as floods, earthquakes and hurricanes. If the property is located in an area where a natural disaster may occur, you need to take out a special insurance policy, if one is available. Check with your insurance agent. Flood insurance, often required by banks, is available through the Federal Emergency Management Administration. If you aren't sure whether your property is in a flood zone, call your county floodplain administrator, zoning or other office that is responsible for maintaining floodplain maps. You may also go directly to FEMA's online map service center.
  
  

Premium Mortgage Insurance

• If you took out a mortgage with less than 80 percent down, your bank probably required you to carry private mortgage insurance, or PMI. This insurance policy is normally included with the escrow payment for property taxes and homeowners insurance. It covers the bank's loss in case you default on the loan, according to the Federal Reserve Bank of San Francisco. As long as you have less than 20 percent equity, you must carry this insurance, even if you don't live in the house.
  
  

Warning

• Many landlords require tenants to take out renters insurance. It is not the landlord's responsibility to provide it. If the tenant is responsible for a kitchen fire or some other damaging household event, his renters insurance will cover it, according to Eric Narcisco of Effective Coverage, a Manhattan renters insurance brokerage. Also, he says, tenants who have renters insurance are also less likely to sue their landlords.