Investing in rental property is an excellent way to earn passive income, grow a real estate portfolio and enjoy tax advantages. If you’ve taken the time to manage a rental property, it’s essential to protect your investment with a proper insurance policy. Traditional homeowners policies work well on primary residences, but landlords need a separate policy to properly protect rental investments. Rental property insurance is a type of property insurance that covers unique risks associated with having tenants, to protect the owner of the home.
Are you renting out a room? A vacation home or single-family property? A fourplex? It’s also important to have the proper coverage for your specific property type. An experienced insurance agent can help determine the best policy for your investment.
Rental Property Coverage, Explained
Rental property insurance coverage varies based on the selected policy and the insurance provider, but in general, a landlord policy will cover:
- Dwelling and any additional buildings on the property (from perils such as fire, lightning, wind, hail, or other covered losses)
- Some contents of the property (such as appliances, fixtures, and water heaters)
- Liability coverage
- Loss of rental income
Landlord policies provide additional coverage that isn’t found in a homeowners policy: liability insurance and loss of rental income. Liability coverage provides protection if someone is injured on the property, such as a tenant or guest of the tenant. If the landlord is deemed responsible for the injury, it can help cover legal or medical costs.
Property damage is also likely, either from a natural event or by a tenant. If a property is inhabitable, the insurance can pay lost rents up to a specified amount to account for what would have been collected if the property was rentable.
Is There a Difference Between Insuring a Vacation Home and an Income Property?
Whether you own a second home that you lease to tenants, just want to rent out a spare bedroom periodically, or make a little extra cash renting out your beach cottage or mountain cabin, the first step should be to call your insurance professional.
If you are planning to rent out all or part of your primary residence for a short period of time, for instance, a week or several weekends you’ll want rental property insurance. If you are planning to lease your home to one person or a couple or family for a longer period of time, say six months or a year, you will likely need a landlord or rental dwelling policy. If you are regularly renting out a vacation home or investment property, this would also require rental property insurance.
Understanding how rental property insurance works will help you be prepared, remain protected, and stay informed when buying a rental property or deciding to rent out space. Speak with an agent who has experience with property rentals to help you determine which policy can offer you the best coverage for your specific rental.
Formed in 2013, AmSuisse, Inc. has quickly distinguished itself as a wholesale operation that specializes in working very closely with our agents and broker partners to develop responsive, individualized service for each client. Our unparalleled writing support, industry-specific expertise, marketing support, responsive proposals and quotes, strong customer service, and strong relationships with our carrier partners have all helped us to provide the best possible coverage for our clients. To learn more about our available coverage, contact us today at (800) 485-0229 to speak with one of our representatives.