More on Home Insurance
More on Home Insurance
Landlord insurance provides property and liability protection for landlords and homeowners who rent out their homes or rental properties.
Published October 6, 2020
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Owning a home comes with a certain amount of risk, and if you rent it out, you’re potentially piling on even more risk. Tenants could damage your personal property, or someone could get injured while on the property and you’d be liable.
Like homeowners insurance, landlord insurance is designed to financially protect you and your home from property damage and accidents. The main difference between the two is that homeowners insurance is designed for people who live in their residence, and landlord insurance is catered towards those who rent out their homes for long periods of time.
If you have a rental property that you rent out long term, you’ll need to get a landlord insurance policy. If the home isn’t your primary residence and you use it exclusively as a rental property, you likely won’t be covered by standard homeowners insurance.
Landlord insurance is designed for people who rent out their homes on a long term basis and contains property, liability, and loss of income coverage
Landlord insurance is primarily meant for non-owner occupied residences
If you infrequently rent out your home on a short-term basis, you may be able to add an endorsement to your home policy for extra coverage
Landlord insurance does not cover your tenant’s personal property or liability, that’s what renters insurance is for
A landlord policy covers the rental property itself as well as certain types of personal property if it's damaged or stolen. Landlord insurance also covers legal or medical fees if someone gets hurt on your rental property.
Landlord insurance covers property damage to your physical rental property and some of your belongings. Like homeowners insurance, each category of coverage has a reimbursement limit, or the maximum amount your insurer will pay you out for a covered loss. Different coverages also have their own separate deductibles too, which you can typically set when you purchase your landlord policy.
Property protection typically includes three different types of coverage:
Liability insurance can help pay for legal or medical expenses if someone gets hurt on your property and needs medical attention, or decides to sue you over their injuries. For example, if your tenant slips and falls down the stairs, and a court rules that your stairwell was not up to code, your landlord liability coverage could help pay for a lawyer. If your tenant breaks their leg, liability coverage can help reimburse their medical expenses.
Landlord insurance may reimburse you for loss of income if your rental property becomes temporarily uninhabitable due to a covered loss, like fire damage. This coverage only protects you for a certain amount of time, depending on your policy limits and how long it takes to rebuild or repair your rental property.
There are certain instances and losses that a standard landlord insurance policy will not cover.
Homeowners insurance covers your home, personal property, and liability in the event your home is damaged, burglarized, or you’re held liable for an accident. As the name implies, homeowners insurance is meant for homeowners — people who own and live in their place of residence. On the other hand, landlord insurance policies are designed for non-owner occupied residences.
Although homeowners and landlord insurance offer similar protection, if you have a rental property that you rent out long term, you’ll need a landlord policy to be covered against property and liability losses. According to the III, many home policies exclude coverage for rental properties, or coverage will come with certain caveats if you rent out your home infrequently on a short-term basis. If you rent out a room in your home every so often for short periods of time, you might be fine with homeowners insurance if you notify your insurer. But some insurance companies will require a coverage add-on, or endorsement to your policy in order for short-term rentals to be covered.
It’s typically on you as the landlord to pay for property damage to your residence, not the renter, unless it can be proven that the renter intentionally caused damage or harm. Since homeowners insurance excludes coverage for rental properties, you’ll need landlord insurance in the event of a disaster.
Airbnb is becoming more and more popular, but the company’s insurance policy isn’t always enough coverage to fully protect your rental. Airbnb offers their own insurance coverage: host protection insurance, which covers up to $1 million in liability coverage if a guest files a lawsuit; and host guarantee, which reimburses you up to $1 million if a guest severely damages your home.
Though this protection seems like a lot, it isn’t necessarily enough because it does not offer coverage for natural hazards or burglary. Landlord insurance may be a smart choice if you Airbnb your rental property long-term. But for short-term rentals, depending on your insurer, you may be able to purchase home-share, vacation, or short-term rental coverage.
Kara McGinley is an insurance editor at Policygenius, specializing in home, auto and renters insurance. She previously worked as a freelance writer and copywriter, and has been writing about insurance since 2019. Kara is an expert at making complicated topics like property insurance simple to understand. Her work can be found in Teen Vogue, The Culture Crush, and more.
Kara has a B.A. in English from East Carolina University.
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