What’s the difference between Landlord Insurance and Homeowners Insurance? Homeowners insurance is for people who own their home (single family dwelling, condo, or apartment) and live there. Homeowners Insurance typically covers the home’s structure and the belongings inside. Landlord Insurance is for the property owner who rents a residence, a guest house rental or a single family rental for example, to a tenant.
Following are common questions about Homeowners Insurance vs Landlord Insurance and their answers.
How much does Landlord Insurance cost and how much do I need?
Home improvement master and pioneer of the DIY television genre Bob Vila estimates Landlord Insurance costing $2,100 per year on average and describes it as a “crucial safety net to help property owners protect their financial investment.” At minimum, Vila recommends having enough coverage to rebuild the structure if a covered peril — such as fire — destroys it. Best to consult your insurance agent. Of course, the cost is based on area, coverage, condition of building, and other varying factors.
What does Landlord Insurance cover?
It’s case by case, or policy by policy. Or insurance company by insurance company — ask a Californian about wildfire insurance. Landlord Insurance basic coverage includes property damage, lost rental income because of temporary inhabitability, in the case of a fire for example, and liability. It’s a good idea to consult your property management company when choosing Landlord Insurance. (They can help with Homeowners Insurance, too.)
What if I want to rent my residence out for only a couple of weeks a year? Like during ski season?
The good hands people at Allstate advise if you plan to have tenants only occasionally, homeowners insurance may be a better fit. Your insurance agent can help you decide if you need Landlord Insurance.
Does Landlord Insurance cover the tenant’s belongings if lost in a covered catastrophe?
No, not typically.
Is Landlord Insurance required?
Not by law, however most lenders require Landlord Insurance if you have a mortgage or you’re financing the property because they have a financial stake in your property, so they want to make sure it’s covered, according to Forbes.
What is Renters Insurance?
Renters Insurance protects the possessions of the renter, who buys the coverage. Some landlords require Renters Insurance as a term of the rental contract or lease.
Any other questions?
We are happy to answer any real estate-related questions. Buying a new home? Managing rental properties? Does moving to Nevada make good financial sense? Place Tenants can help. Call 800-886-1193 or email [email protected].
