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:
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.
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.
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.
When determining if your tenants need this, you must consider certain factors:
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.