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Benefits of Homeowner Insurance When you Own a Rental Property

System - Monday, May 21, 2018
 
PropM Property Management is a professional property management company serving the Sarasota/Bradenton and Portland, Oregon areas, and we get a lot of questions about insurance. The owners we work with often ask us about renter’s insurance and homeowner’s insurance, and today we’re clearing up some of the confusion that people often have about their insurance policies.

 

Homeowner’s Insurance and Renter’s Insurance

Your homeowner’s insurance covers your home and any losses that are caused by fire, lightning, snow, wind, hail, or any other natural disasters that may happen. A renter’s insurance policy is the only way for the tenants to cover their belongings. Your homeowner’s insurance would not necessary cover the tenant’s couch if your roof leaks, for example. However, a renter’s insurance policy would cover that couch. So, a combination of homeowner’s insurance and renter’s insurance will keep all parties in good shape and ensure that everything is covered.

 

Tenant Liability Insurance

Tenant liability insurance can also be put into place. With this type of policy, any tenant damage would be covered. Perhaps the tenant somehow causes flooding to the bathroom. In that case, the renter’s insurance would cover the damage. Tenant liability insurance is not required by state law, so it’s a bit tricky to enforce. However, it’s a good idea for you and your tenants.

 

Landlord versus Owner/Occupant Homeowner’s Insurance

When a tenant has renter’s insurance that covers their belongings and you have your own policy as a homeowner, you’re covered. Make sure you let your insurance agents know when you convert your home to a rental property. Your insurance will change from an owner/occupant policy to a landlord policy once you have renters living in the home. Make sure you have the correct coverage so you’re in good shape if something does happen to your property.

If you have any additional questions about insurance for you or your tenant, please contact us at PropM Property Management.