Oftentimes, landlords think they can keep their standard homeowners insurance policy while renting out their home instead of purchasing a landlord policy. However, when you rent out your home your homeowners insurance company will not typically cover claims made on a standard homeowners policy.
A Landlord Policy is Different From a Standard Home Insurance Policy!
For example, a standard homeowners policy typically provides up to 70% of the dwelling coverage for contents coverage. However, the contents coverage under a landlord policy can be altered to provide the amount of coverage needed by a landlord. If you are renting out an unfurnished home, for example, you would not need a large amount of contents coverage as you might if you are renting the home furnished. So, if you are renting out an unfurnished property, you might want to purchase just enough contents coverage to protect any appliances you have in the home.
Also, typically under a Landlord Policy you would have Fair Rental Loss coverage which replaces Loss of Use coverage under a standard homeowners insurance policy. Fair Rental Loss coverage protects your rental income in the event your home is damaged or destoyed due to a covered loss and you cannot collect rent on the property while it is being repaired/rebuilt. Limits for this coverage are typically around 10% of the Dwelling Coverage-however this can vary from one policy and company to the next.
As a landlord, it is always a good idea to encourage your tenants to purchase rental insurance. Rental insurance offers liability coverage which would be a great asset in the event that someone presents you and/or your tenant with a lawsuit for damages that occurred on your property while your tenant was residing there.
Also, since your Landlord Policy would not cover the renter’s possessions in the event they were stolen or damaged in a loss, they should have renter’s insurance to cover their belongings while they are living in your home.
For More Information Or A Free Quote Please Contact Jason Shroot at 714-988-3325 Jason@diversifiedinsurancequotes.com
