When you are trying to determine the best way to protect your home and your belongings that are inside of it from disasters, it helps to have as much information as possible. There are various types of insurance policies available to homeowners, which can make it difficult to determine what you need and what you don’t.
For any homeowner, one of the scariest thoughts is a fire. Fires are not only exceptionally dangerous for you and your loved ones, but they also cause extensive damage to your property and your personal belongings. The cost of recovering from a fire can be crippling, but if you the right type of insurance, rebuilding your life after the flames are extinguished may not be as daunting. Having the best type of coverage to safeguard you in the event that a fire does occur is crucial. Two options include homeowners insurance vs dwelling fire insurance.
What’s the difference between homeowners insurance vs dwelling fire insurance policies? Below, we provide a brief overview.
Homeowners insurance offers coverage for the structure of a home, as well as its contents and the property it sits on along with liability. These policies offer protection from fire and will help to pay for the cost of repairing any damage, including replacing and rebuilding.
Homeowner’s insurance policies are available for one, two, three and four family homes that the owner resides in; hence the use of the word “home”. If the owner of the property lives in one of the units of a four family home, for example, the home will be insured by a homeowner’s policy.
Dwelling property insurance policies are written for rental properties. In other words, if you own a property but do not reside within the property and rent it out to tenants, you would need to have a dwelling fire insurance policy.
Dwelling coverage vs homeowners insurance. Like home insurance, dwelling fire insurance also provides coverage for any damages or losses that occur as a result of a fire. This includes the structure of the home, the property the home sits on, and the contents of the home, so long as the contents within the property are owned by you, the homeowner. It also covers liability. This insurance does not cover the personal property that belongs to tenants.
Dwelling fire insurance also covers other structures that are on the premises of the property, but are not attached to the main structure; for example, if a detached garage is damaged in a fire, this type of insurance would cover it.
This type of policy can also include fair rental value and additional living expense coverage. With fair rental value coverage, your insurance provider will cover the loss of rent if the home is not able to be lived in after a fire. Additional living expense coverage covers the cost of any additional expenses that may arise if a fire occurs.
With dwelling fire insurance, tenant relocation is also provided. Tenants receive a certain amount of money to help them relocate to a new location if the dwelling was left uninhabitable after a fire. This is the only portion of dwelling fire insurance that offers benefits for tenants. For that reason, it is highly recommended that you encourage or preferably require your tenants to purchase a renters insurance policy.
If you own a property and rent the entire structure out to tenants, protecting yourself with dwelling fire insurance is a smart idea. Fires can happen for a number of reasons, and often, they occur as a result of carelessness that tenants may cause.
For example, one of your renters may leave a candle burning or might leave a space heater turned on, which could start a fire. Since you don’t reside on the property, it can’t be covered by a homeowner’s insurance policy. That means that if you aren’t properly insured, you will end up having to pay for the losses out of your own pocket.
Without fire dwelling insurance, you protect yourself from the perils that are associated with a fire. This type of insurance is a wise investment for anyone who owns, yet does not live on and rents out, a property.
We hope this article on homeowners insurance vs dwelling fire insurance has been informative. So if you are asked what the difference between homeowner and dwelling fire insurance is – know you know.
