Landlord - Rental Property Insurance

What Is Landlord/Rental Property Insurance?

Are you renting out your home or vacation property? There’s a good chance you need landlord/rental property insurance. It depends on a few factors, including whether you live in the same house as your tenant.

If the renter and you (the owner) live under the same roof or it’s rented out only irregularly, then typically you may endorse your homeowner’s policy with “unit rented to others” coverage. If you live separately and have frequent renters, however, then you need a separate policy.

Types of policies

When shopping for coverage, you probably will come across three different types of “dwelling policies”: DP-1, DP-2 and DP-3.

  1. DP-1: Basic insurance covering just the basics, such as fire and vandalism

  2. DP-2: Offers expanded coverage to include named perils, such as damage from a windstorm

  3. DP-3: Recommended; covers most perils unless specifically excluded and offers replacement cost coverage, rather than actual cash value (the value of items based on depreciation)


Levels of coverage

Inquire about whether your policy includes coverage for loss of rental income. For example, if the property must be vacated due to a disaster, you want coverage for the loss while the property is repaired.

Don’t forget liability coverage, too. It will protect you in the event that a renter gets injured on your property and sues for damages.

Last but not least, make sure your tenants obtain renter’s insurance to cover their personal property. It’s in their own best interests, and yours.