Do I Need to Insure My Rental Property?

You absolutely need to have insurance on your rental property, especially if you plan on having other people live in the home. This insurance helps protect you and your renters in the event of a disaster so you aren’t left with a substantially large bill on your hands should something go wrong.

Home Insurance vs. Rental Insurance

Though you might think home insurance covers your rental property, they’re actually two different types of coverage.

If you plan on renting out your home short-term, a few days, or several weekends, your home insurance policy might be adequate. Some companies require you add an endorsement onto your existing policy to include renters. If you rent out your home as a bed and breakfast or any other type of businesses arrangement, you’ll need business insurance.

Long-term rentals, which are six months or more, require rental insurance policies because they need more protections for the home than provided by a standard homeowners insurance policy. Rental insurance covers damage from weather, vandalism, and other structural damage covered by typical homeowner’s insurance policies.

It also includes liability coverage in case your renter is hurt in the home. This could help save you thousands and cover the cost of legal bills if your renter sues. Rental insurance also provides coverage for loss of rental income for when you’re unable to rent out the home. This comes into effect when the home is being repaired and is unsafe for a renter to be living in it.

If you’re still unsure of the difference between home insurance and rental insurance, we can help give you a better idea of the different policies available.

Renters Insurance

In addition to buying your own rental insurance policy, you should encourage, or even require, your renters to purchase renters insurance. Your rental insurance on the home will not cover the possessions belonging to the person renting your home. Therefore, your renter should have their own insurance to help them recoup losses in the event of damage to the house.

If you provide the furnishings for the home instead of your renter, your own rental insurance should cover the costs of replacing these items. Responsible renters will have no problem agreeing to purchase renters insurance. Here are some tips on how to find good renters.

  • Check references from previous landlords.
  • Perform a legal background check. Be aware that some states won’t allow you to use a history of nonviolent crime as a valid reason to refuse to rent to a person.
  • Confirm employment status with their employer.
  • Keep your emotions out of the business arrangement.

When you decide to rent your home, it’s important you have the protection you need. Call an agent today and he/she can help you find the insurance policy that perfectly fits your needs.

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