Why Landlord Insurance Instead of Standard Homeowners Insurance for Your Investment Property

If you rent out your single-family home or an investment property on a long-term basis, then you will need landlord insurance because a typical homeowner’s policy likely doesn’t have the coverage you need. While homeowners and landlord insurance both cover the physical building for damage from a covered loss, for homeowners, you must live in the home.

In addition, there are some other differences between homeowners and landlord policies regarding personal property, and liability coverage. While homeowners’ insurance may cover items such as furniture, clothing and computers, landlord insurance covers property that is rented with the unit such as furnishings for a furnished rental as well as tools and equipment used to service the property.

Landlord insurance typically helps pay for the resulting medical expenses or legal fees for anyone hurt on your property. On the other hand, liability coverage in a homeowners policy typically only covers those who live in the home.

As an investor, you must be careful to ensure you have a full coverage policy, with no gaps for things like roof or hail coverage, as many carriers will ensure a property but exclude certain types of coverage.

Finally, neither landlord insurance nor homeowners insurance covers your tenants' personal belongings, so you should make renters insurance a condition of your leases.