Have you recently bought a new home and are planning on renting out your old one? Have you tried to sell your house and have been unsuccessful and are considering renting? If you do decide to rent out your home it is important that you purchase rental property insurance.
A homeowner’s insurance policy will cover your home if it burns down, take care of your possessions if there is a break in, and pay the legal and medical bills if someone is hurt while on your property. The problem is, a homeowner’s insurance policy may not offer protection if the home is being rented out. This is where rental property or landlord insurance comes into play.
Risks of Renting Out Your Home
The typical homeowner’s insurance policy is written for a single family residence that is owner occupied. If the home is rented out, it will no longer be covered. The main reason for this is because there are more risks involved in insuring a rental property.
When a home is rented out there is the added risk of liability for injury. This includes injuries to the people renting the home as well as any guests that might come into the home while they are living there. Insurance companies see more claims on homes that are occupied by tenants. The main reason for this is because most tenants do not care for the property as well as the owner would. A tenant is much less likely to report any maintenance needs and may be unfamiliar with the home, such as where the water shut off valve is located.
Choose a Rental Property Insurance Policy
The best way to ensure that you are protected when renting out a property is to have a rental property insurance policy. A basic landlord insurance policy will cover big risks such as fires, thefts, ice, and wind damage. It is recommended that you consider an umbrella insurance policy to cover additional damages that may occur to a property that is being rented out. This will help cover additional liability on the property.
As a rental property owner you can expect to pay quite a bit more for rental property insurance than you would pay for a regular homeowner’s insurance policy. The main reason for this is because of higher risks involved in insuring a rental home.
When renting your home it is also a good idea to require the tenant of the home to have some type of renter’s insurance policy in place. A renter’s insurance policy will protect their belongings should anything happen to them while they are residing in the home. Ask for proof that they have attained this coverage before they move in to further protect yourself as the landlord.
Although he worked in the insurance business for years, Frank Harrington gave it all up to go freelance and share his expertise with the world. He now writes for InsuranceComparison.net on everything from health insurance to landlord insurance. He recently wrote about the best ways to compare landlord insurance.