So you’ve decided to rent out your home. Perhaps you’re moving to a bigger place or taking an extended trip. Whatever the reason for your decision, should you get landlord insurance?
What is landlord insurance?
Sure, homeowners insurance will cover you if your house burns down or if there’s a break-in, but it might not cover you for damage incurred while renting your home to someone else. Landlord insurance covers exactly that, including the house itself, sheds or other structures and the owner’s possessions, but not the tenant’s possessions. It also covers lost rental income if the house is damaged and uninhabitable, and, in the case of a lawsuit or injury, there is some liability protection for the owner. There are also specific policies, such as a dwelling fire policy or special perils policy, that cover you in the event of fire, storms or ice damage.
What’s the risk in renting out your home?
Homeowners insurance covers an owner-occupied single-family residence. If this doesn’t sound like your current situation, you’re probably not covered. The reason is it’s a much higher risk for the insurance company. Insurance companies experience more claims on tenant-occupied property as opposed to owner occupied. Your risk also rises as you are now responsible for any damage done to the property by a third party.
Will I pay more?
Yes, expect to pay 15-20% more than your current homeowners policy. This cost is even higher if you’re only renting out your property short-term. However, the risks are higher, so the cost becomes worth it.
If you’re about to start renting out your home and still not sure if you need landlord insurance, call or email us. We can walk you through the process and find the best policy for you and your specific circumstances.