Rental property insurance or ‘Landlord Insurance’, is advantageous for when you own your home or condo and use it as a rental property- either long term or short term. Typically a standard home owners insurance policy does not cover losses while your home is rented. A standard home owners insurance policy is designed to cover a primary residence for the insured not a rental property. So its important to have more specialized insurance for your rental property.
Some common rental property scenarios include:
Short-term rental/Primary residence (think Airbnb, VRBO, etc.)
1. Some insurance companies may allow a short term rental, providing you have informed your insurance company. Other companies require an “endorsement” on your home owners insurance policy in order to provide coverage.
2. If you plan on renting your primary residence for short periods on a regular basis to “guests”, this would constitute a business. A standard home owners insurance policy does not provide coverage for business activities in the home. To have proper coverage you would need to purchase an endorsement to your current policy or start a different type of policy called a ‘Fire policy’ aka Landlord policy, or a business policy such as a hotel/motel or bed & breakfast policy.
Long-term rental/Second home (think Landlord)
If you are renting your home to person(s) for a long period of time, say six months or more, you will likely need rental property insurance, also called a ‘Fire Policy’. Typically rental property insurance costs about 25-50 % more than standard home owners insurance to pay for the increased protection. Landlord policies provide coverage for damage to your property from lightning, wind, hail, ice, snow, and other covered perils. Landlord insurance also provides coverage for your personal items left on the property for maintenance or tenant use such as appliances, lawn mowers, snow blowers, etc. Most of these types of policies do NOT cover theft coverage if your tenant steals your personal property, so make sure to ask you agent if you have coverage. Most rental property insurance, also covers loss of rental income if you are not able to rent out your property due to damage from a covered loss.
Rental property insurance only provides insurance for your structure and your financial interest in the property. It does not provide protection for a tenant’s personal belongings. In order to avoid conflicts with tenants concerning damage to personal belongs, many landlords require tenants to purchase renters insurance before signing a lease.
So whether you own a home that you rent to tenants, rent out an extra bedroom through Airbnb or VRBO, or rent out your vacation home when you’re not using it, it’s important to talk with a knowledgeable insurance professional.
Our concierge insurance agents will take the time to explain your options and tailor a rental property insurance policy suited just for you. Ensuring the protection of your assets.