07 Aug Renter vs Real Estate Investor Insurance
Real Estate Investor Insurance vs. Renter’s Insurance
While it is very easy to get confused with insurance nomenclature, the differences between Renter’s Insurance and Real Estate Investor Insurance are quite easy to explain.
Renter’s Insurance
Renter’s Insurance is specifically designed to protect tenants who are renting a property. The coverages are designed to protect the tenant’s personal belongings, medical expenses, additional living expenses, and liability protection. While coverage for personal belongings is self-explanatory, “additional living expenses” can be expanded on. This coverage is to provide reasonable living expenses should the property become uninhabitable, due to a covered peril like fire. Additionally, the liability coverage protects the renter from potential lawsuits or claims filed by someone who is injured or files a claim, due to the tenant’s actions.
Real Estate Investor Insurance
Real Estate Investor Insurance is different in several areas. The coverage typically focuses on damage to the physical structure,due to a covered peril. The covered perils will be very similar to 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. 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 property of others. Liability policies can help cover defense costs, medical expenses and/or settlement costs arising from a covered peril.
Landlord Insurance Policies are often built for investors that 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.
Real Estate Investor Insurance vs. Renter’s Insurance
In short, Rental Insurance is purchased by the tenant to protect their interests, and Real Estate Investor Insurance is taken out by the property owner to protect the dwelling and their interests. It is important that both parties (property owner and renter) maintain both of the coverages, as they protect vastly different things.
It is highly recommended to read and understand your policy and how to ensure you are protected, as well as discuss it with a licensed insurance agent.
Real Estate Investor Insurance vs. Renter’s Insurance