Property Management Blog

Our last newsletter focused on the important topic of liability when it comes to insurance. This month, we want to make sure you’re not making a common mistake: thinking your homeowner’s insurance will be adequate when you’re renting out a home.
 

How is Homeowner’s Insurance Not Right?

A homeowner’s insurance policy likely won't cover a home that you rent out. Landlord insurance is required instead, which typically provides coverage for the structure of the home, and also includes the liability coverage that we discussed in the last newsletter.

Converting from a homeowner’s policy to a landlord policy isn’t just about your own financial protection. It’s also a requirement if you have a mortgage on the home you're renting to tenants.
 

Make Sure you Have FULL Coverage

You’re looking for a policy that covers more than just your physical structure and your liability. You also want to make sure you’re protected in the following ways:

• Flood or hurricane coverage. If you live in a flood zone or in an area where tropical storms are a threat, you’ll want to make sure you can rebuild after any damage from water, wind, and debris.
• Loss of Rent. When a covered loss occurs, your tenants may have to move out of the property temporarily while repairs are made. If they’re not living in your home, you’re not earning any rent. Loss of rent coverage keeps your income consistent.
• Improving properties to bring them up to code. If you have a very old home or building, you might need to make improvements to keep it safe. There are insurance riders to cover this.

Check your insurance policy and whether it provides adequate coverage. As property values increase, so does the amount you’d need to replace that property after a major loss.
See you next month, when we talk about associations and what it takes to insure them.