Homeowners’ vs. Landlord Insurance

Homeowners vs. Landlord Insurance, understanding the difference.

There are several key distinctions to be made between the typical homeowners’
insurance policy, as compared to policies designed specifically for landlords.  As more individuals have turned to investing in real estate as part of their retirement
strategy, the choices for more tailored policies for investors have increased
dramatically.

The difference between homeowners’ and landlord insurance

While most people are familiar with homeowners’ insurance, there are some key
differentiators that should be explored, when an investor begins to purchase
homes to rent as an investment.  

Homeowners’ Insurance

Typically, homeowners’ insurance policies are designed to protect the residential
dwelling occupied specifically by the owner.  The key difference is that this
policy is to protect the structure and the contents or personal belongings of the
resident owners. The policies most often cover damage by fire, wind, hail, theft,
and vandalism, among other perils.  A policy will typically include additional
coverage, such as Additional Living Expenses, which can provide temporary
accommodations, meals, or additional items, while the property is being repaired.
 These policies will likely include liability insurance to protect the owner against
lawsuits and/or claims from bodily injury or damage that occurs on the covered
property.

Landlord Insurance

Landlord insurance is different in a few key areas.  The coverage typically focuses
on damage to the physical structure, due to a covered peril.  The covered perils
will be very similar to the ones covered by homeowners’ policies (fire, wind, hail,
theft, and vandalism, among others). However, these policies most often do not
include coverage for contents belonging to renters, as that is purchased by the tenant in the form of Renter’s Insurance.

Additional Coverages

In addition to the coverage outlined above, additional coverage, such as Loss of Rental Income, is often provided.  Loss of Rental Income is designed to compensate the owner in the event of a loss, due to a covered peril.  Liability Insurance is often included in Landlord Insurance
Policies to protect the property owner from lawsuits for injuries or damage to the property of others.  Liability policies can help cover defense costs, medical expenses, and/or settlement costs arising from a covered peril.

Landlord Insurance Policies

Landlord Insurance Policies are often built for investors who have multiple rental dwellings and will cover multiple, single-family homes under one policy, whereas Homeowners’ Policies are built to cover one owner, occupied property, or perhaps a few rental or vacation dwellings. There can be several other nuanced differences between these types of policies;

Homeowners vs. Landlord Insurance

Therefore, it is highly recommended to read and understand your policy and
discuss it with a licensed agent.

Asset Protection Insurance Associates

At Asset Protection Insurance Associates (APIA) we provide Landlord Insurance
Policies where the owner can place multiple single-family homes on one policy with one payment and one renewal date.

Just give us a call and we would be happy to help you.

Shannon G. DeLaune
President