Do I Need Landlord Insurance if I’m Renting My Home? July 28, 2021
If you plan to rent your home out, it’s a good idea to check out landlord insurance to protect your property while it’s being occupied by someone else. A typical home insurance policy may cover you if:
- Your property burns down
- Someone breaks into your home
- You experience wind or hail damage
- There are legal and medical bills due to an injury on your property
Note that your homeowner’s insurance policy doesn’t protect you from all these claims if you’re renting out your property. You need to purchase landlord insurance to get the protection you need from these unwanted and unexpected incidents.
Let’s delve into the discussion to understand why you need landlord insurance when renting out your property.
What is Landlord Insurance?
Landlord insurance offers protection from financial losses to property owners who decide to rent out their homes. If tenants damage the property or it was subject to a theft incident, landlord insurance helps the property owner by covering the expenses.
Does Renting Out Property Increase Risks?
When you rent out your property, it no longer meets the criteria for a typical homeowner’s insurance policy. However, in some cases your homeowner’s policy may provide coverage for an occasional short-term rental if a property owner goes away for a few days.
If you wish to convert your summer home into a rental during the off seasons, it becomes a red flag for the insurer.
This risk may increase for an insurance company if the landlord decides to rent on a full-time basis, because it increases the owner’s responsibility for any damage to the house. Therefore, you must be vigilant since the chances of injury or damage occurring on your property’s premise increases when you rent.
Insurance companies typically deal with more claims on properties occupied by tenants because they don’t take care of the property as well as the owners would typically. Moreover, tenants typically don’t identify or request any maintenance needs. In most cases they are also unaware of main systems such as HVAC and water shut-off locations in the house.
Do You Require Renters Insurance for Tenants?
When determining if your tenants need this, you must consider certain factors:
- Do you have a plan to do some short-term rentals via Airbnb? If yes, then your answer is no, they don’t need it.
- Do you have a plan to rent out the room for a long-term period? If yes, it is better for them to get it to protect their personal property.
In a nutshell, landlord insurance can protect you in case of legal expenses, medical bills, or other financial losses that can occur if you decide to rent out your property.
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