One of the most common questions that property owners have is whether their homeowner’s insurance will cover damages or if they will need landlord insurance. The answer to this question depends on a few factors. Let’s take a look at these below to help you better decide which insurance policy will meet your coverage needs.
Are You Living In The Home?
One major concern when it comes to homeowner’s insurance is whether you live in the home or not. If you are not living at the property and plan on renting it out, then you will need a Youi Landlord Insurance policy.
How Long Is The Rental Agreement For?
The amount of time a rental agreement is for can determine the type of insurance you need for the property. If you live in your home and occasionally rent it out on the weekends, then a homeowner’s insurance policy will likely cover your needs. In the event that you rent out your property on an ongoing basis, a landlord insurance policy is going to be necessary.
It’s best to talk to your homeowner’s insurance provider to see their coverage limits. Your agent should be able to answer all your questions about potential coverages in the event that an incident occurs.
Coverage Differences Between Policies
Although landlord and homeowner’s insurance policies cover the structure of the property in the event of damage, that is where the similarities stop. Landlord insurance covers both personal property and liability lawsuits. Let’s take a closer look at each of these coverage areas below.
Personal Property Coverage – When you have personal property at the home you are renting out, the insurance provider will pay to reimburse these items in the event that damage occurs. Realize that property items are restricted to those that are actually used to service the rental property.
Liability Coverage – Landlord insurance covers any injuries that happen to tenants or visitors to the property in events where you are found liable. This coverage includes paying for medical expenses, funeral costs, legal fees, and loss of income. Homeowner’s liability insurance only covers injuries that happen to you and your family members who live in the home.
What They Won’t Cover?
Both landlord and homeowner’s insurance will not cover the possessions of tenants renting the property. These personal items are only protected under a renters insurance policy. This type of insurance can be required by the property owner for the tenant to maintain while they are letting the property.
As you can see, there are many differences between homeowners and landlord insurance. As a general rule of thumb, if you don’t live at the property you should be opting for landlord insurance. If you live at the property, typically homeowner’s insurance will work, however, you should verify this with your homeowner’s insurance provider to be completely sure. Either way, having insurance on your property is a necessity to protect you against major financial loss in the future.