It is essential to cover your investment with an acceptable insurance policy if you want to purchase and maintain a rental property. Homeowner policies work well for primary residences, but landlords can buy a different policy covering their rental investments. It's called rental property insurance or Landlord's insurance.
Who Needs Rental Property Insurance
If you rent your home for a couple of weeks, homeowners insurance may cover your property and liability while renting it out. However, if you rent out your house for months or even years, you'll need rental property insurance to have proper insurance coverage.
You're just responsible for the house and your property as the Landlord. Your policy does not protect the personal belongings of tenants. They'll need insurance from landlords to protect their personal belongings.
Why Landlords Need Rental Property Insurance
Insurance coverage for rental property will vary, but plans will usually include the dwelling or structure of your property, property contents belonging to the owner, scope of liability, and rental income loss.
Rental property insurance includes:
- Dwelling coverage: Covers any damage to the structure of the house or apartment for lease.
- Liability Coverage: Protects the Landlord from legal and medical of having someone injured on your property.
- Loss of Rent Coverage: Protects against loss of rent payments from tenants due to it not being habitable because of a disaster. You can look at this as guaranteed insurance coverage for rent.
- Coverage for the Landlord's personal property: The personal belongings of a landlord within the parcel is insured.
Most of its coverage is almost identical to homeowner's insurance. The only difference is that it has distinctive aspects that lack insurance for homeowners and account for the additional risks of renting out your property.
Conclusion
It's essential to take note of how long you expect to rent your house. Homeowners' insurance coverage would not be an acceptable replacement for rental property insurance in most situations. The existence of tenants in a rental property poses unique risks that insurance for homeowners does not cover, especially if you intend to rent a property for a long duration.
At Old Bay Insurance Agency, Inc., we do our best in making sure that our clients are well-protected with affordable and comprehensive policies. We make sure to go the extra mile to help you with your needs. To learn more about how we can help you, please contact our agency at (410) 777-5390 or Click Here to request a free quote.