Rental Property Insurance VS Homeowners Insurance

Rental property insurance also known as landlord insurance is a form of coverage you use for the property you rent out. Homeowners insurance is a home insurance policy that is designed to protect a primary residence. There are many different situations where one may be more useful to you than the other.

Here’s a Summary of Landlord Insurance and Homeowners Insurance

Rental property insurance and homeowners insurance will vary from zip code to zip code and between insurance providers. Although, both policies are very similar in many ways and they both protect a home you own. Most of both homeowners insurance and landlord insurance will have the following coverages:

Dwelling coverage:

This portion of your insurance coverage will protect the actual structure of the home in the event it is damaged or destroyed by a covered peril. It will cover you for disasters such as a fire, storm, wind and more. 

Other structures coverage:

The coverage will help to cover you for damage of the other structures that are on your property. Items such as fences, sheds, gazebos, detached garages and more. 

Homeowners insurance:

A standard homeowners insurance policy is probably what you will want to carry if the home you’re insuring is the one you live in. If you’re only renting the home out every now and then this may be enough coverage for what you need. Please speak with one of our agents beforehand to discuss if this is your best option.

Rental property insurance:

Landlord insurance is pretty much a necessity if you’re planning on renting out your home full time. Rental property insurance will offer you unique protection and help you safeguard your investment the best way. Homeowners insurance doesn’t cover your tenants property. 

The Most Impactful Differences Between Homeowners Insurance and Rental Property Insurance

Rental property insurance and homeowners insurance are similar in many ways, but there are some key differences that you may want to keep in mind. Below we outline a few ways these two home insurance policies may be different:

Personal Property Coverage

Homeowners insurance:

A standard homeowners insurance policy will cover you for items such as electronics, appliances, jewelry, furniture, clothes, and more.

Rental property insurance:

Landlord insurance is designed to cover the items used to maintain the home such as appliances like washers, dryers, dishwashers and refrigerators. Typically landlord insurance will not cover items you left in the home such as a bike or other item that isn’t used for upkeep. 

Liability Coverage

Homeowners insurance:

One of the great things about homeowners insurance is it will protect your finances if you become liable for a person that is hurt or injured on your property. It can help pay for legal fees and medical costs regardless of where it took place. 

Rental property insurance:

Landlord insurance will only help to cover you for disasters that happen on the rental homes location. If one of your tenants sustains an injury due to something malfunctioning on the property, rental property insurance will help to cover legal and medical expenses.

Additional Living Expenses VS Fair Rent Value

Homeowners insurance:

Additional living expenses (ALE) is usually included in a homeowners insurance policy. This portion of your homeowners insurance coverage will help to pay for hotel stays, eating out, and other costs if you are unable to use your home while it is being repaired or replaced. 

Rental property insurance:

Landlord insurance will cover you with fair rent value. This part of your rental property insurance coverage will help to reimburse you for any lost rental income if your property needs to be repaired because of a covered peril.