Are you interested in renting out your property? Whether you’re renting out one room or a whole house, having insurance is beyond important. If you don’t have it, you could potentially face catastrophic losses!
Homeowners Insurance vs Landlord Insurance
If you’re looking to rent out your entire property, you’ll probably need landlord insurance. But sometimes homeowners’ insurance makes more sense. Here is a breakdown of the two insurance types to give you a better idea of what you need.
Homeowners Insurance
While homeowners’ insurance policies are not one-size-fits-all, they typically cover damages created by things such as fire and theft. You can use the payouts for any repairs or replacements for your home.
It also offers dwelling insurance, which covers the building you live in. It also may cover things like a tool shed or detached garage. Homeowners’ insurance will also cover your personal belongings.
A big part of homeowners’ insurance is liability protection. This protection covers you when someone visiting your home is injured. It’s important to note, however, that homeowners’ insurance policies greatly differ by provider and property type.
If you’re planning on renting out your home for a single occasion or very rarely, homeowners’ insurance may be enough. If you plan to rent out regularly or have an interest in renting out an entire property, you’ll most likely need landlord insurance.
Landlord Insurance
While landlord insurance is similar to homeowners’ insurance in certain ways, it is also quite different. That’s because it provides extra coverage for things a landlord specifically needs, such as:
- Nonpayment of rent
- Property damage caused by tenants
- Loss of earnings
- Accident liability
If you’re a property owner and you want to rent out your home, you are not required by law to have insurance. We recommend you have insurance anyway so that you may cover yourself should anything like property damages or loss of rent occur.
Major Differences Between Homeowners’ Insurance and Landlord Insurance
Landlord insurance usually covers items used to service your rental property. These items are things like laundry units or in-unit appliances, but not the landlord’s personal property. It may also cover the repair or replacement costs of items like snow blowers that help you maintain the property.
A big difference between these two policies is the way they handle liability claims. With homeowners’ insurance, you’re protected for damage you’ve caused. Landlord insurance, however, covers any accidents on the rented property.
Neither landlord insurance nor homeowners’ insurance cover damage to tenants’ personal belongings. That’s why it’s a good idea to suggest (or require) your tenants to purchase renters insurance should any issue occur.
Final Thoughts on Insurance
Knowing what insurance you need is essential for protecting your property. By knowing the difference between homeowners’ insurance vs landlord insurance, you can get the right plan for your property!
