Homeowners insurance protects your home and personal belongings against a variety of common hazards, including fires, windstorms, vandalism, theft, and more. But if you own any rental properties, you’ll need rental property insurance as standard homeowners insurance policies do not cover properties that you don’t live at.
While there are some special circumstances in which homeowners insurance might cover a rental property, in most cases, you’ll need rental property insurance to cover the unique risks that come with letting a tenant occupy your property.
Here’s what you need to know about whether or not homeowners insurance covers rental properties.
Does Homeowners Insurance Cover Rental Properties?
Homeowners insurance offers several standard coverages to help protect your personal belongings and primary residence against common risks. These coverages include dwelling coverage, other structures coverage, personal property coverage, loss of use coverage, and liability coverage.
When you rent out your property, your insurance company is taking on additional risk as tenants may not treat the property with the same respect that they would if they owned the home. Insurance companies also aren’t able to individually vet every tenant that vacations at your rental property, making it difficult to accurately assess risk.
It’s also important to keep in mind that a standard homeowners insurance policy only covers one property. If you own or rent multiple properties, you will need to purchase additional coverage to protect your other properties.
So when does homeowners insurance cover rental properties? There are some instances in which a standard homeowners insurance policy might cover rentals.
If you own and live in your home but rent it out infrequently, like for holidays or other special occasions, your homeowners insurance may cover you. However, you need to notify your insurance provider in advance and verify that they will cover the property while it is being rented out.
Moreover, if you tend to rent out your home on a short-term basis, you may be able to add short-term rental coverage to your homeowners insurance policy.
Lastly, if you own a vacation rental, beach house, or cabin that is vacant for long periods, you may be able to purchase secondary home insurance to cover your rental properties. This type of insurance offers similar coverage as standard home insurance to help protect your property and personal belongings.
What Is Rental Property Insurance?
Rental property insurance, also called landlord insurance, offers coverage for long-term rental properties.
Landlord insurance offers several key coverages, including:
● Dwelling coverage: Covers the primary structure of the rental property against damages caused by covered hazards, including fires, vandalism, storms, etc.
● Personal property coverage: Covers personal property that is owned by the landlord and stored at the rental property. This may include built-in appliances, tools, lawn maintenance equipment, cleaning supplies, and similar items. This does not cover items owned by tenants.
● Liability coverage: Covers expenses resulting from liability claims if a tenant or visitor is hurt while on the rental property.
● Loss of rent coverage: If you are unable to rent out your property due to a covered loss, this can reimburse you for lost rent while the property is being replaced or repaired.
Rental property insurance does not cover:
● Tenants’ personal belongings and furnishings
● Damages caused by floods or earthquakes. Property owners need to purchase additional coverage to protect against these disasters.
● Damage or property loss that occurs while the property is vacant.
● Maintenance issues or general wear and tear.
● Damages caused by negligence.
If you own rental properties, it’s important to instruct your tenants to purchase the necessary insurance to protect their personal belongings against damages. All tenants should carry an active renters insurance policy.
Do You Need Insurance for Rental Properties?
Yes, if you own rental properties, it’s important to have adequate coverage to protect your rental properties against common hazards.
Rental properties are susceptible to many of the same perils as any other home, including:
Without a homeowners or landlord insurance policy, your rental properties will not be covered against damages. Instead, you would have to pay for any repairs out of your own pocket.
Request an Insurance Quote
While homeowners insurance protects your home against common hazards, you’ll need landlord insurance to cover any properties that you rent out to others. Whether you’re renting out your property long-term or as a vacation rental, our team at FIB Insurance is here to help.
At FIB Insurance, we work with homeowners and property owners in Miami and nearby cities to find affordable home and landlord insurance policies. Contact us today to get a custom quote and learn more about the best insurance options in Miami, FL.