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There are many reasons to be a landlord in Michigan- including the strong demand for rental property and the generally favorable landlord/tenant laws. However, the Great Lakes State is not without risks for property investors.
Having landlord insurance to protect your properties in case of damage is essential- despite not being required by law.
Between the epic snowfall and other potential extreme weather events, your property could be susceptible to expensive damage, and without insurance, it could be a huge financial burden to bear.
This guide to landlord insurance in Michigan has everything you need to know about protecting your rental property in the state and doing the best for your business.
It covers policy inclusions, average costs, ways to save money, and a few companies to consider when looking for coverage options.
Landlord Insurance and Rental Costs in the US
Across the US, rental costs and landlord insurance prices vary significantly. Both rates depend on the location, size, value, and condition of the specific property in question, amongst other things.
Because of this, the national average rates or median prices do not give people an accurate idea of what they should expect to pay- but they are good to know, nonetheless.
The average cost of renting a property in the US right now is a little shy of $2,000 per month.
Comparatively, the average price of a landlord insurance policy nationwide is around $2,100 per year.
What Is Michigan Landlord Insurance?
In a nutshell, landlord insurance in Michigan is a type of home insurance policy designed to protect those who rent their properties to others.
Each policy is different, but they all provide coverage for damages and expenses caused by various events.
The law may not require rental property owners to have landlord insurance, but the vast majority of mortgage lenders do.
Without it, you are left to cover any expenses alone- which can be financially crippling if you fall victim to a severe weather event or a costly liability case.
Landlord Insurance VS Homeowners Insurance: Key Differences
It is easy to see why there is some confusion between landlord insurance and homeowners insurance.
A lot of what is covered applies to both policies, but there are some extras included in a rental property insurance policy that you don't find with standard home insurance.
The key differences are:
- Different types of liability coverage
- Insurance for risks that are unique to landlords
- Higher overall average premiums
In short, landlord insurance is for people who rent to others, while homeowners insurance is for people who live in the property they own.
What Is Included in Michigan Landlord Insurance Coverage?
Your Michigan landlord insurance policy should include the following.
Dwelling Coverage
Dwelling insurance covers the replacement cost to rebuild all or parts of your property if they are damaged in a covered event.
Liability Coverage
Landlord liability coverage pays medical bills and legal expenses if someone is injured on your property, and you are liable.
Some policies also offer liability coverage for legal issues with tenants, such as evictions and rental disputes.
Personal Property Insurance
Your personal property is covered by landlord insurance. Anything inside the rental property that you own (furniture, appliances, décor, etc.) will be replaced by insurance if damaged.
Rental Income Protection
The best landlord insurance policies include lost rental income protection. This means insurance will cover your lost rent payments during times when your property becomes uninhabitable (only due to covered peril).
What Is Not Included in Michigan Landlord Insurance Cover?
Most things relating to property damage can be added to your coverage, but there are three main categories that are not covered.
Tenant Belongings
Only items belonging to the policyholder are covered by landlord insurance. You tenants should obtain renters insurance to cover their personal property.
Intentional Damage
If malicious or intentional damage is caused by a tenant, it is unlikely to be viewed as a covered loss. Instead, the most common road to take is filing a lawsuit for the damages.
Wear and Tear
You have to pay for repairs and replacements of an appliance or piece of equipment that is old. Wear and tear is normal- so it is not something your insurance policy will cover.
Make sure you replace things that could leak or cause damage before they break down. You may not be covered if the damage could have been avoided through basic maintenance.
How Can Landlord Insurance Help Landlords and Rental Property Managers in Michigan?
There are many reasons to protect your rental properties with landlord insurance in Michigan. Here are just some possible scenarios when coverage comes in handy.
- If there is a break-in at your rental property
- In the event of a natural disaster
- During tenant disputes
- If someone is injured in your rental property
- When severe weather causes leaks, roof damage, frozen pipes, or flooding (as long as you have flood insurance)
- In case furniture or appliances that you own are destroyed or damaged in a fire
- If you lose rental income because your property becomes uninhabitable
Unexpected things happen all the time, and when those events damage your property, the expenses can be crippling.
With landlord insurance coverage, you don't have to face these difficult times alone.
Without it, you face steep bills and significant threats to your rental property business.
What Is the Cost of Landlord Insurance in Michigan?
It is difficult to say how much it will cost to insure rental properties in Michigan because of how many factors contribute to the cost calculation (see below).
According to Clovered, the average cost of a landlord policy in Michigan is:
- $1,758 for a house valued at $200,000
- $2,510 for a house valued at $300,000
- $3,071 for a house valued at $400,000
These averages are more or less on par with surrounding states but are little more than a guideline. The actual price you should expect to pay depends on many different things.
How Are Landlord Insurance Costs Calculated?
Several factors are considered by insurance providers when calculating the cost of a landlord insurance policy.
Most of it has to do with the property itself- predominantly how much coverage it needs and how high the risk of severe damage is.
The type of unit you have is also considered- a.k.a. single family home, condo unit, apartment, commercial property, etc.- and the condition it is in plays a major role.
An insurance company will almost always require a property inspection before giving a final price, as they need to establish the risks and actual value.
They consider what the cost would be to completely rebuild and how high the chances are of that amount of coverage being required.
Rates also vary depending on what additional coverage options you need and how high your deductibles are.
Way to Save Money on Rental Property Insurance in Michigan
You could reduce your Michigan landlord insurance costs using the following tips.
- Upgrading appliances before the inspection
- Mitigating storm damage risks by reinforcing parts of your property
- Increasing your deductibles
- Paying annually instead of monthly
- Agreeing to use autopayments
- Bundling policies
- Screening tenants on DoorLoop
- Replacing damaged equipment
It is a good idea to compare discounts and deals offered by different insurance providers before settling on a policy.
Some companies offer more than others, and you could save more money through one provider than another.
Five of the Best Landlord Insurance Companies Offering Coverage in Michigan
There are many rental property insurance policies to choose from. The following five insurance companies offer coverage in Michigan and are worth your consideration.
You can usually get a free landlord insurance quote online, but remember that a property inspection might be required before you get a final price. Some companies have a 'call us' way of working- meaning you can only get a quote by dealing directly with a local agent.
DoorLoop: The Ultimate Property Management Tool for Michigan Landlords
DoorLoop is not just the place to turn for helpful insights into how to run a successful rental property business- it is also a practical tool you can use to manage that business every day.
In short, DoorLoop is a comprehensive property management tool that makes it easier to manage your portfolio and handle the daily running of things conveniently and efficiently from anywhere.
It doesn't matter how big or small your rental property business is- there are still a lot of things to organize to keep things running smoothly.
DoorLoop takes the stress out of it and replaces it with a user-friendly all-in-one platform that lets you control and monitor your units, finances, and to-dos without any difficulty.
Some of the best features include online communication for maintenance requests and rent reminders, an automated rent collection system, advanced built-in accounting tools, tenant screening options, and the chance to create a customized application website for prospective tenants.
You also gain access to marketing tools with direct posts to Zillow and Trulia, and your tenants have their own portal to keep track of rent, upcoming maintenance, landlord visits, direct communications, and so much more.
Try it yourself today, or learn more by scheduling a free DoorLoop demo!
Final Thoughts
Having landlord insurance in Michigan is highly recommended for anyone who wants peace of mind and financial protection from the unexpected. There are plenty of landlord insurance policies to choose from, so take your time to find the best fit.
You can also enhance your rental property business and get more out of your landlord experience with DoorLoop.
Managing your property portfolio efficiently can reduce some of your risk factors and hopefully lower the likelihood of needing to make an insurance claim.
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