The Evolution of Squatter Coverage in Landlord Insurance
Landlord insurance typically doesn’t cover costs accrued in a squatter situation. Proper Insurance, which offers short-term rental insurance, created a unique type of coverage coming out of the COVID pandemic that is specifically designated to protect property owners in situations where a renter refuses to leave the property once their lease has ended.
When an individual decides to turn one of their properties into a rental, they need insurance apart from homeowners insurance.
Landlord insurance is more than just a safety net; it serves as a guardian for real estate investments. It traditionally covers aspects like property damage, lost rental income if the dwelling becomes uninhabitable, and liability protection, according to Investopedia.
Additional typical coverage options include flood insurance, emergency coverage, guaranteed income insurance, and extended construction expenses. Yet, one vital aspect often omitted from the landlord insurance umbrella is squatter coverage.
Squatter situations can create financial turmoil for property owners, often incurring immense expenses. Proper Insurance’s squatter coverage offers a solution, covering legal costs, loss of rental revenue, and any property damage inflicted, as noted by insurance expert Massey.
This coverage is rare in the marketplace, with many policies featuring exclusions that leave landlords vulnerable. Massey explains, “an exclusion around property entrustment” means if someone is allowed into a home and then vandalizes the property, the insurance will not compensate those losses.
What sets Proper Insurance apart is its tailored coverage for those renting out on short- and mid-term bases. This innovative squatter coverage emerged prominently during the COVID pandemic when travel restrictions caused a massive shift in rental behavior. Homeowners began to offer extended stays to local travelers avoiding metropolitan areas.
As the scenario unfolded during the pandemic, short-term rentals faced a drastic decline. Massey observed a transformation: “Fast forward into the COVID pandemic, short-term rentals are more or less shut down across the country.” With intrastate travel rising, people sought refuge in rental homes for 30 to 90 days, prompting landlords to adapt.
Homeowners shifted from short-term rentals to accommodating longer stays, resulting in pressing concerns. “What if they don’t leave?” was a common query that resonated throughout the industry. In response, Proper Insurance swiftly innovated, introducing a coverage type that had never before existed.
Squatter protection carries an additional premium and applies in situations where renters sign a lease, but subsequently refuse to vacate after it concludes.
Through this coverage, Proper Insurance provides an emotional shield for landlords seeking security and peace of mind amidst evolving rental practices. As Massey remarks, “[It was created] to allow some more flexibility and peace of mind for these folks who are going to take longer-term stays.”
Mid-term rentals cater to specific groups, particularly traveling professionals, such as nurses, who require extended housing arrangements. In many states, anyone staying longer than 29 days risks being classified as a squatter, leading to possible legal complications. Through Proper Insurance’s innovative approach, further protection is provided against potential squatting issues.
In a world shaped by shifting rental dynamics, the emergence of squatter protection coverage by Proper Insurance stands as a beacon of adaptability. It showcases how innovative thinking can offer solace to property owners, transforming unique challenges into comprehensive solutions. As they navigate this new terrain, landlords can find strategies that not only safeguard their investments but also infuse their property management experience with trust and security.
