Landlord, is insurance for a rental property required?
Since the passage of the Alur Act in 2014, non-occupant owners of a unit in a condominium are required to purchase PNO (non-occupant owner) insurance.
This requirement stems from the fact that the owner is liable for any damage originating from their unit, and the costs can quickly add up. However, before purchasing PNO insurance, it is important to check with the condominium association to see if the policy it has purchased already includes PNO insurance for non-occupant unit owners.
Even if the property is rented and therefore insured, a non-occupant owner can purchase supplementary PNO insurance to obtain additional coverage. This precaution can be useful if the tenant’s home insurance policy offers limited protection, or to cover the furnishings in the case of a furnished lease.
PNO insurance is a comprehensive insurance policy that covers damage caused to third parties (such as neighbors) by the homeowner, their beneficiaries, or their employees in connection with the residence. It may also cover damage resulting from various risks, such as fire, water damage, theft, vandalism, storms, or natural disasters. In the event of a claim, it may cover additional costs, such as technical assessments.
It is possible to purchase additional coverage, such as "interference with use" coverage (lack of maintenance, construction defects), “Neighbor and Third-Party Liability” coverage (if an incident affects a neighbor’s or a third party’s property), or “Unpaid Rent” coverage (which covers unpaid or late payments of rent and service charges).
The cost of PNO insurance varies depending on various factors, such as the type of housing (furnished or unfurnished, house or apartment), the square footage, the municipality, and the occupancy rate over the course of the year. When choosing from among the many policies available, it is important to pay close attention to various details, such as the deductible amount, the maximum compensation limit, and the maximum duration of rental vacancy.
