Whether you plan to rent out your current residence or you have a vacated property you want to put renters in, your current homeowners insurance policy isn’t enough to give you the legal and property protection you need.

Learn the difference between homeowners and landlord insurance coverage and about the additional coverage you need to be a successful landlord.

Homeowners Versus Landlord Insurance

Homeowners insurance covers the basics of your home, including most property damage, fire, and premises liability, if included in your policy. Homeowners insurance covers claims only if you currently reside in the property, although some insurance policies will include coverage on the home if it is temporarily vacant for a short period.

If you rent out your home and only have homeowners insurance and someone receives an injury on the property or the home suffers from weather or fire damage, your insurance company may not cover your claim. You may be at risk of having to pay for damages or injuries yourself or risk renters suing due to lack of proper home coverage.

Landlord insurance is similar to homeowners insurance, only the coverage revolves around the renters in the home and any guests they have on the property. The landlord does not have to reside on the property to have landlord insurance.

You have many types of additional coverage you can add to a landlord insurance policy to customize the protection you need.

Since landlord properties have more risk than traditional owner-occupied properties to an insurance company, expect your premium to go up when you add landlord insurance to your policy. However, the protection you and your renters receive in having the correct insurance on your rental property outweigh the increased costs you may have.

Types of Landlord Insurance to Consider

Talk to your insurance agent about adding the following types of coverage to your landlord insurance policy.

Open Peril Coverage

Open peril coverage is additional protection for your rental property that covers incidences excluded from the traditional dwelling insurance plan. Open peril coverage commonly covers flood, mold, renter neglect or abuse, and other concerns that can be costly to repair. You want to thoroughly protect your investment, so consider this coverage.

Lost Rental Income Coverage

Should your rental property receive damage during vacancy or a renter destroys your property, having lost rental income coverage allows you to recoup lost income. You may have limits on this type of insurance, so talk to your insurance agent about income recouping caps and other concerns.

Personal Property Coverage

Your landlord insurance policy protects your building and property but not your personal belongings. If you have appliances, furniture, or outbuildings on the rental property you want covered, add personal property insurance to your policy.

Additional Liability Coverage

Liability coverage protects the landlord in the event a renter or a visitor to the rental home is injured. Make sure your landlord insurance policy has the highest liability coverage available, even if you pay a higher premium for the protection.

Before renting your property out, make sure all potential renters have renters insurance, even if you have a complete landlord insurance policy in place. Since your landlord insurance does not cover personal belongings of renters, the renter needs to get their own insurance for their personal belongings.

Having homeowners insurance for a rental property is not enough. Talk to your insurance agent about the types of landlord insurance you need based on the type of property you own, how much coverage you desire, and your budget. Our team of insurance specialists at Metropolitan Insurance Service Consultants, Inc is here to help you today.