Why You Need Landlord Insurance When You Rent Out Your House

If you bought a house and are moving into it but decided to keep your existing home as a rental property, you will not only need to purchase homeowner's insurance for the new house you are buying, but you will also need to change the insurance you currently have on your existing house. The homeowner's insurance you currently have will not be the right type of insurance if you rent out your house. Instead, you will need to purchase landlord insurance.

What exactly is landlord insurance?

Landlord insurance is a form of homeowner's insurance but is uniquely designed for rental properties. When you move from a house you own and rent that house out, the house no longer qualifies for regular homeowner's insurance. Instead, you will have to switch your policy to a landlord insurance policy, which is the type of policy that is designed exclusively for rental properties. This type of insurance protects your home in every way possible when renting it out, and it does this by offering two main forms of coverage.

What forms of coverage does it include?

The two main forms of coverage a landlord policy includes are:

• Property coverage – This coverage protects the home against perils that could potentially occur to it and damage it, such as a fire or storm.
• Liability coverage – This coverage protects against accidents that could potentially occur on the property that might lead to lawsuits.

You may be able to obtain additional types of coverage on a landlord policy as well, but you would need to speak to an agent to see what types are available and what types you might need.

Why do you need landlord insurance?

The main reason you need to switch your policy from a homeowner's policy to a landlord policy is to compensate for the differences in risks. When a person owns a house, he or she may provide better care for the house, as it is this person's house. When a person rents a house, he or she may not feel the same way about the house, primarily because the house is not his or hers. Because of this, the risks are different for insurance policies for homeowners versus renters, and this is the main reason you need to switch policies when you rent out your house.

If you need to update your homeowner's insurance coverage policy or purchase a new policy, contact an insurance company of your choice. 

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