Renting out a property comes with a different set of risks than living in one. A standard owner-occupied homeowners policy is generally not designed for rental use. Landlord insurance is structured to address the exposures that come with tenants, rental income, and investment property ownership.
Dwelling coverage
Dwelling coverage helps protect the physical structure of the rental property — the building itself — against covered perils. The limit should reflect the estimated cost to rebuild, not the market value or loan balance.
Landlord-owned personal property
If you furnish the rental or leave appliances and equipment for tenant use, landlord-owned personal property coverage may help protect those items. A tenant's belongings are generally not covered under the landlord policy; renters insurance is typically the tenant's responsibility.
Premises liability
Premises liability coverage may help protect you if a tenant or visitor is injured on the property and you are held responsible. This coverage may include legal defense costs, depending on the policy.
Loss of rental income
If a covered loss makes the property uninhabitable, loss of rental income coverage may help replace the rent you would have collected during the repair period. The terms and duration of this coverage vary by policy.
Water damage
Water damage from a covered cause, such as a burst pipe, may be included or available as an option. Coverage for slow leaks, sewer backup, or water from outside the dwelling typically depends on the policy and may require endorsements.
Optional additional coverages
Depending on the policy, optional coverages may include vandalism, burglary, equipment breakdown, and other endorsements. What is included by default varies, so it is worth reviewing the policy details carefully.
Vacant properties
A property that is vacant for an extended period may require a different type of policy. Standard landlord policies often limit or exclude coverage for vacant dwellings, so a vacancy policy or endorsement may be needed.
Renovation situations
If the property is undergoing renovation, a builder's risk or course-of-construction policy may be more appropriate than a standard landlord policy. Coverage depends on the scope of work and the policy terms.
Landlord insurance is different
Landlord insurance is specifically designed for rental use and is different from a standard owner-occupied homeowners policy. Coverage may include some or all of the items above depending on the policy, carrier, and underwriting. There is no single landlord policy that automatically includes every coverage.
Insurance coverage, eligibility, limits, exclusions, and availability vary by carrier and individual risk. This article is for general informational purposes only and does not modify or replace the terms of any insurance policy.
