If you rent out your home, homeowners insurance may not cover it. Look into landlord insurance instead.
Perhaps you’re moving up to a bigger home and holding on to your former residence as a rental property. Perhaps you’ve tried to sell your home without success. Whatever the reason, if you’re thinking about renting out your home, you will need to consider landlord insurance.
While homeowners insurance may cover your house if there’s an accident, it may not cover your home if you decide to rent it out. Be sure to ask your insurer. Some policies may cover an occasional short-term rental if you’re going away for a few weeks. However, if you plan on renting out your home indefinitely, you’ll need to purchase landlord insurance.
When you decide to become a landlord, inform your insurer and ask about a specific landlord insurance policy. Although coverage from a basic landlord policy isn’t as broad as a homeowners policy, it should include big risks like fire, wind, theft, and ice damage. As you don’t have to protect the tenant’s personal belongings (he or she is responsible for that), you can focus on thoroughly protecting your investment.
Landlord insurance (or rental property insurance) typically covers the house itself, other structures on the property (for example garages or sheds), the owner’s possessions, lost rental income, and some liability protection for the owner.
It may also be worth considering an umbrella policy that provides additional liability protection beyond the limits of your landlord policy. Owning more than one house and building your net worth is worth protecting! Talk to your insurer to find out how to secure more liability coverage through an umbrella policy.