So what's the difference between landlord insurance vs homeowners insurance? It all depends on how you use your property - if you rent out a house for more than a few weeks each year, homeowners insurance might not provide enough protection to protect yourself.
Landlord Insurance vs Homeowners Insurance
Individuals who rent out their homes are faced with decisions on how to best protect their property.
There are distinctions as to what can be covered by various insurance choices.
The tenant should feel secure about the home they are living in. Coverage options often depend on the frequency of tenant occupation and the homeowner's use of the property.
Two of the main types of coverage options for rental homes are landlord insurance vs homeowners insurance.
In most rental properties, the home itself is the main concern. The structure must be protected from natural disasters, malfunctions, and other damages. Landlord insurance is the preferred option for this type of coverage. Coverage can include things like weather damage and leak damage. Since the home does not belong to the tenant, they should not be responsible for holding insurance on them. The policy must be in the homeowner's name. It can be reassuring to both the tenant and landlord to know that the home is protected.
The coverage of homeowner's insurance extends to cover personal belongings. For example, a leak in the roof that ruins furniture and clothing is covered by homeowner's insurance. Damage to the home is paid for, and the furniture and clothing are replaced. In cases where the home in uninhabitable during repairs, homeowner's insurance pays for alternate lodging. This extensive coverage is not necessary for landlords, in most cases.
If a landlord leaves personal property on the premises, however, this type of policy is beneficial. Some homes are fully furnished for tenants. The furnishing belong to the homeowner and should be covered by their insurance policy, in this situation. Landlords may also choose to leave personal property in storage in the attic or garage on their rental property. This is another case where a full homeowner's insurance policy can be useful. Take the time to discuss the various options with a qualified professional.
Length of Rental
The length of tenant occupancy is also taken into consideration when decisions are made for landlord insurance vs homeowners insurance. Homes are often used for short term rental. Homes like this are rented out for vacationing families and special events. These homes are often used by the homeowner and their family at times, too.
Landlord insurance may not be enough coverage for these types of rentals. Landlord insurance usually indicates that the homeowner has limited use of the home, reducing their need for extensive coverage. A home that can be occupied by the landlord at any time during the policy should be covered by homeowner's insurance.
Long-term rental contracts indicated that another party assumes residence in the home for a majority of time. This leaves the responsibility of items in the home to the tenant. The landlord can be secure with landlord insurance, only. Long-term leases are usually one year or more, leaving the landlord to visit the property minimally.
The landlord policy does not usually include liability for any injuries of people living in the property. This type of coverage is reserved for those with full homeowner's policies. It is important to consider if this is necessary before making a final decision on landlord insurance vs homeowners insurance.
If you have family members living on the property instead of random tenants, you may want to carry more coverage. If the landlord frequents the property regularly, a policy with liability may also be necessary. The frequency of landlord and family occupation should be considered before declining a homeowner's policy with full liability coverage.
Tenant's often move out and leave various degrees of damage to the property. Normal wear and tear may not be covered by landlord insurance. Extensive damage by an irresponsible tenant, however, is usually included in a landlord policy. This can come as a great relief to landlord's who find large amounts of damage upon inspecting their home after a tenant moves out.
Vacant homes are often broken into and vandalized, as well. If the home is unoccupied for a length of time, or put on the market fro sale, you might consider vacant & unoccupied home coverage.
Landlord Insurance vs Homeowners Insurance - The Bottom Line
We hope this article on landlord insurance vs homeowners insurance was informative. Landlord and home policies have some similarities. Homeowner's insurance is full coverage of the home and its contents. It also covers the occupants and their visitors. Landlord insurance is meant to cover the home itself, leaving the contents to be cared for by the tenant. Various rental arrangements and family used can make a difference in the type of policy that is needed. Consider the use of the home when making a decision.