Differences Between a Homeowners and Landlord Policy…
If you own a home, you are probably familiar with a homeowners policy. If you happen to own other property that you rent to others, you may have or will need to get a Landlord Policy. There are several key differences between these two policies and you need to be aware of how they operate. You could find yourself with a lack of coverage if you don’t have the correct policy and endorsements for your rental properties.
The biggest difference between a homeowners policy and a landlord policy is the coverage on contents. Homeowners policies have a coverage for your Personal Property or Contents. This is the coverage for all of your personal belongings in your home. I like to say, if you turned your home upside down, everything that falls out, that’s what the contents coverage if for. On a landlord policy, contents is something that is typically not included unless you have the right endorsement to add it on. The tenant is responsible for protecting their property. This is typically accomplished by getting a renter’s policy, which almost all major carriers offer and they are very affordable for the tenants to have in place. If you have some of your own furnishings in your rental property, you want to make sure you can add some coverage for those items, whether it’s a washer and dryer, a living room suit, whatever it may be that you have furnished. You need to check with your agent to make sure you can add that to your landlord policy. If not, it may be time to start looking for a new provider for your landlord coverage or you may need to switch the type of policy you have with your current carrier to get that coverage.
Loss of Use and Loss of Income
The second major difference has to do the with Loss of use coverage on a Homeowners policy. This coverage helps to pay for a place for you to stay if you lose the use of your home due to a claim. It may pay for a hotel for you to stay in for a while or a house to rent up to the coverage amount listed, which is typically 30% of whatever your Dwelling coverage is listed. On a landlord policy, the Loss of Use is actually Loss of Income, because if there is a claim on your property and you cannot rent that property to a tenant, then you are losing potential income. The loss of income is on a landlord policy to help pay for the lost income from not being able to lease out your property.
Those are the two biggest differences in a homeowners policy and a landlord policy. There are also some other differences in the types of Landlord policies. Some policies may cover more perils than others. If you’re not sure what coverages you currently have, contact your agent to have a policy review so you know what coverages you have and make necessary changes if you thing you need better coverages. If you ever have any questions about your policy, even if you’re not insured with our agency, please feel free to reach out to us. We’re more than happy to assist in any way we can.