Insurance for Rental Owners

Questions for your agent

• Ask which type of policy fits a home rented to others. It is often called a landlord or dwelling policy.
• Ask about liability coverage, and whether an umbrella policy makes sense for you.
• Ask whether loss of rental income is covered if the home can’t be lived in after a covered loss.
• Ask about vacancy. Many policies change coverage once a home has been empty for a period of time, so find out what that period is.
• Ask about flood and earthquake coverage. These are usually separate policies.
• Finally, decide whether you’ll require residents to carry renters insurance. If you do, put it in the lease.

Ask your agent one simple question: “If this home burned tomorrow, what exactly would be paid, and what wouldn’t?” The answer tells you more than any brochure.

Insurance checklist

From the guide’s own insurance checklist. Tick each one as you go. Your ticks stay on this device. These are examples; your home may need others.

• Agent told the home is a rental
• Right policy type confirmed, often a landlord or dwelling policy
• Liability limits reviewed, and an umbrella policy considered
• Loss of rental income coverage confirmed
• Vacancy rules understood, including how long before coverage changes
• Flood and earthquake coverage decided
• Exclusions read, especially wear and tear, slow leaks and mold
• Renters insurance requirement decided and written into the lease
• Digital folder kept for each home: policy, condition reports, photos and receipts
• Policies reviewed once a year, and after any vacancy, renovation or new resident

All done. A stressful claim can now be an organized one.

Common coverage gaps

A standard owner’s policy often leaves out flooding, earthquakes, normal wear and tear, slow leaks over time, mold from long term moisture and residents’ belongings. These are examples. Coverage can also change when a home sits vacant. Every policy is different, so your policy and your agent are always the final word.

If you live in an area that floods, plan ahead. Flood policies through the National Flood Insurance Program usually take about 30 days to begin. FloodSmart.gov explains the options.

When a loss happens

1. People first. Make sure residents are safe and have somewhere to stay if the home can’t be lived in. If anyone is hurt, call 911 or get medical care.
2. Then stop further damage quickly if it’s safe to do so, like shutting off the water or covering a broken window. Keep receipts for every bit of emergency work.
3. Photograph and video the damage thoroughly before any cleanup or repairs. Then take more photos as you go.
4. Contact your insurance company promptly and keep notes of every call, with dates and claim numbers.
5. Keep talking with your residents, kindly and often, all the way through the repair.

A detailed condition report with photos is one of the most valuable things you can have if you ever need to file a claim. Give every item a comment, whatever its condition, with photos to match.

Protecting yourself

Please don’t assume the owner’s insurance covers your things. It usually covers the building, not what’s inside. Renters insurance protects your belongings and your personal liability. From the guide’s own tips for residents. Tick each one as you go. Your ticks stay on this device. These are examples; your home may need others.

• Ask your agent whether additional living expenses are covered if the home becomes unlivable.
• Ask whether flood coverage is separate where you live.
• Take photos or a video of your belongings and keep receipts for anything valuable.
• Keep your policy number and agent’s contact in your phone.
• Review your policy once a year and whenever you move.
• If the lease requires renters insurance, don’t let it lapse.

All done. Your things and your peace of mind are better protected.

If something is damaged

1. Take a breath, and make sure everyone is safe first.
2. If you can do it safely, stop further damage. Photograph everything before you clean up or throw anything away.
3. Report damage to the home to the owner right away, in writing, with photos. If your belongings are affected, contact your own insurance company too.
4. Keep receipts for cleanup and any temporary housing, and write down every call and claim number. You did exactly the right thing.

Guides that go well with this one

• Renter's Insurance Basics
• Record Keeping for Rentals
• Flood Readiness
• Caring for a Vacant Home
• Move-In and Move-Out Inspections

Helpful resources

National Association of Insurance Commissioners: Consumer Insurance Information and FEMA National Flood Insurance Program: FloodSmart. Your state insurance department and a licensed insurance agent can help with your own situation too.