How does landlord insurance coverage apply in a squatter situation?
One insurance company is striving to alter the norm by covering the expenses incurred by landlords due to squatters.
Landlord insurance usually does not cover expenses incurred during a squatter scenario. Proper Insurance, a company that provides short-term rental insurance, introduced a new type of coverage in response to the COVID-19 pandemic, specifically designed to safeguard property owners in the event that a renter refuses to vacate the premises after their lease has expired.
An individual must obtain additional insurance when they choose to rent out one of their properties.
According to Investopedia, landlord insurance typically covers property damage, lost rental income due to property uninhabitability, and liability protection.
Additional coverage options include flood insurance, emergency coverage, guaranteed income insurance, and additional construction expenses.
Squatter coverage is not typically included in landlord insurance.
The cost of dealing with squatter situations can be enormous for property owners.
Nick Massey, director of sales at Proper Insurance, stated in a phone call with Planet Chronicle Digital that one problem with squatting is the property damage that often accompanies it.
Squatter coverage from Proper Insurance covers legal expenses, loss of revenue, and property damage caused by squatters, as stated by Massey.
Insurance policies often exclude coverage for property damage caused by someone who has been allowed access to a home, Massey stated.
Those renting on a short- and mid-term basis are eligible for Proper Insurance's unique coverage.
Our ownership team established an insurance policy tailored to the contemporary property investor approximately 10 years ago, as stated by Massey to Planet Chronicle Digital.
During the COVID pandemic, when vacations were halted and homeowners were allowed longer stays in their rental units, the squatter coverage became a factor.
"During the COVID pandemic, short-term rentals were mostly shut down across the country. However, there was a movement of intrastate travel from people out of metropolitan areas into short-term rental homes, which were more remote for longer-term stays. These stays ranged from 30 to 90 days."
Massey said that homeowners who shifted from short-term rentals to longer-term arrangements expressed similar concerns.
"What if they don’t leave?"
Massey stated that we promptly answered that question by developing a unique coverage that has never been done before, anywhere, with our squatter protection.
In cases where a renter signs a lease but fails to vacate the property upon lease expiration, squatter protection can be utilized as an added fee.
Massey explained that it was created to provide more flexibility and peace of mind for those taking longer-term stays.
Mid-term rentals emerged as a new industry during the COVID pandemic, according to Massey's statement to Planet Chronicle Digital.
"We now offer mid-term rentals that cater to traveling nurses, primarily from the medical professional field. These homeowners see this as an opportunity to house these individuals in their properties, but they stay for a longer term. In most states, if you stay for 29 days or more, you become a squatter. To provide an extra layer of protection, we offer an additional service in case of a squatting situation."
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