Protect Yourself When Renting Your Home

You absolutely have insurance issues to consider when renting out your home. As you might have guessed, rental property owners have some unique insurance needs. A standard homeowners policy isn’t appropriate for rental property, because:

(1) you don’t need to insure the contents of the house, unless you provide furnished accommodations;

(2) you need to be more concerned about liability issues; and

(3) you need to protect yourself against the loss of rental income.

A good rental property policy should provide the following, however the best proactive protection you can do is rent to people with good credit scores, and offer to repair the small things before they become large issues.

Broad coverage for the physical structure of the house:

  • Coverage for other structures located on the property (garages, sheds, etc.)–this coverage is often limited to 10 percent of the coverage for the house but usually can be increased if needed
  • Coverage for your property left on the premises (appliances, maintenance equipment, etc.) Many policies designed for rental properties give a minimal amount of coverage. Check to make sure it is enough
  • Coverage for loss of use, if you lose rental income as a result of a covered loss. Many mortgage companies are now requiring that this coverage be included before providing a loan on a rental property. Without this coverage you will have to reach into your pocket to pay the continuing mortgage payments.

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