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Homeowners and landlords use their property differently, so they face different risks. That\u2019s why several distinctions exist between homeowner\u2019s insurance<\/a> and landlord insurance<\/a>.<\/p>\n For insurance purposes:<\/p>\n A homeowner<\/strong> lives in a primary residence full-time. They own the home completely or make a mortgage payment. Usually, they keep most of their belongings at this home, too.<\/p>\n A landlord<\/strong> rents\/leases the property out for use to another party for long-term residency. Landlords keep very few belongings at the home, beyond things like appliances, light fixtures and perhaps lawn care machinery.<\/p>\n And for short-term rentals \u2014 like Airbnb properties \u2014 there is another sort of insurance available.<\/p>\n If you\u2019re about to become a landlord by renting out a home that was previously your main residence, or a home you inherited, it\u2019s vital that you buy landlord insurance. You need to make sure you have the right coverage at the rental property to protect yourself, financially.<\/p>\n And, since you\u2019re making changes to your property insurance, it\u2019s a good idea to shop around for several quotes. You may find significant savings!<\/p>\n At Einsurance.com<\/a>, our experienced team of licensed insurance agents works hard to match consumers with the right insurance products. In this piece, we\u2019ll explain everything you need to know about landlord insurance versus homeowner insurance.<\/p>\n Keep reading to learn about:<\/p>\n We\u2019ll start with some important key points that apply to both landlord and homeowner\u2019s insurance policies.<\/p>\n Both landlord insurance policies and traditional homeowner insurance policies are built on the notion of fire coverage. Both types of policies will pay \u2014 up to policy limits \u2014 to rebuild a home after it burns down.<\/p>\n This is called \u201cCoverage A,\u201d the cost to rebuild a home from the ground up.<\/strong> Insurers use formulas to figure your Coverage A amount, and many other coverages are based on a percentage of that number.<\/p>\n Both landlord insurance and homeowner\u2019s insurance also cover perils like:<\/p>\n And generally, neither policy will cover earthquakes or floods. For those perils, you\u2019ll probably need to buy an \u201cendorsement\u201d<\/a> or a separate policy.<\/p>\n For the consumer, there are three primary distinctions between a landlord policy and a homeowner policy. They are:<\/p>\n First, a landlord policy does not offer much coverage for the contents of a structure.<\/strong> In other words, if this rental home burns down to the ground, a landlord policy will not cover things like furniture, clothing, cosmetics, electronics, tools or computers kept at the home.<\/p>\n The assumption is that most of the contents in the home belong to the tenant, not the landlord. And the tenant can buy renter\u2019s insurance<\/a> to cover their belongings.<\/p>\n This is different from a homeowner\u2019s insurance policy, in which Coverage C equals 30% to 50%<\/a> of your Coverage A. This contents coverage exists to replace your belongings after a covered peril.<\/p>\n So, for instance, if your primary residence is valued at $200,000, your policy may provide another $100,000 after a total loss, to replace all your stuff.<\/p>\n Pro tip:<\/strong> If you plan to rent out this home as completely furnished, be sure to mention that when getting quotes for landlord insurance. You may wish to buy extra contents coverage.<\/p>\n As a landlord, you will face more liability issues. We live in a very litigious society, meaning that people like to sue each other whenever they can for a fast paycheck. And if your tenant, or their guest, gets hurt on your property, you will probably find yourself in court.<\/p>\n Remember, in the insurance world, \u201cliability\u201d equals financial responsibility.<\/p>\n If a tenant gets hurt, or if their property gets damaged through your negligence, you will be financially responsible to make them whole again. Liability coverage exists to protect you from lawsuits.<\/strong><\/p>\n In some cases, your liability insurance will \u201csettle\u201d with a claimant and write them a check. In other cases, they\u2019ll help pay an attorney to represent you in a lawsuit. It\u2019s up to the insurer to decide what path they take.<\/p>\n Therefore, many landlord policies include extra liability coverage. And often, landlords choose to buy as much liability as they can afford.<\/p>\n Pro tip:<\/strong> If you\u2019ve bought the most liability coverage available for your properties, and still feel you need more coverage because you\u2019re a high-net-value individual with lots of assets, you can buy an added liability coverage with an umbrella policy<\/a>.<\/p>\n And finally, know that a landlord policy can help protect your rental income after a covered loss.<\/p>\n Suppose you\u2019re earning $1,500 per month on a rental home. One day, it burns down completely. Your landlord protection policy might cover that rental income for up to a year, in addition to paying to rebuild the structure.<\/p>\n If it takes a whole year to rebuild the rental, that\u2019s $18,000 of income you could miss without landlord insurance.<\/p>\n Now that you know the differences between landlord insurance and homeowner\u2019s insurance, let\u2019s talk about rental property insurance requirements.<\/p>\n Rental properties are not<\/em> your main residence, nor are they a second home or summer home where you might spend time occasionally. They\u2019re not<\/em> short-term rentals (Airbnbs), either. Insurers consider them to be commercial properties, which exist to generate income for you.<\/p>\n Now, every state has slightly different laws and every insurer presents a slightly different offering. As of 2024, there is no state law or federal law that requires landlords to buy insurance for a rental property. <\/strong>But if you\u2019re making a mortgage payment on the place, the mortgagee may require you to carry property insurance with a specific deductible.<\/p>\n As a landlord buying insurance, you will probably need to provide some photos and documents proving that a rental home is:<\/p>\n When you buy a landlord policy, you can expect the insurer to send out an inspector to verify everything you\u2019ve said about the residence.<\/p>\nWho Needs Landlord Insurance?<\/h2>\n
Landlord Insurance Vs. Homeowner\u2019s Insurance<\/h2>\n
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What is the Difference Between Landlord Insurance and Homeowner\u2019s Insurance?<\/h3>\n
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Contents Coverage Differences<\/h4>\n
Coverage \u201cC\u201d is For Contents<\/h4>\n
Liability Issues<\/h4>\n
Landlord Policies Help Protect Your Income<\/h4>\n
Rental Property Insurance Requirements<\/h2>\n
You May Need to Provide Documents<\/h3>\n
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What Does an Insurance Inspector or Risk Inspection Specialist Do?<\/h4>\n