Key Differences Between Home Insurance and Rental Property Insurance

Owning a residential property can provide shelter, stability and security. Furthermore, these investments may offer lucrative financial opportunities in some cases. Whether you’re purchasing a home with the hope of it accruing value, a desire to make upgrades and flip it or the goal of renting it out to tenants, understanding how to secure your fiscal interests is essential. That’s where the various types of insurance available for residential properties, such as home insurance and rental property insurance, come into play.

What Is Home Insurance?

Home insurance, also known as homeowners insurance, is a policy generally intended for a house you plan to live in yourself. These policies can typically offer multifaceted coverage for various incidents and perils that may affect you, your family and your home. Many standard home insurance policies include the following:

• Dwelling and other structures coverage—This can help with repair costs if your residence or other structures on the lot, such as detached garages, are damaged by covered incidents.

• Contents coverage—This may assist with losses involving your personal possessions, such as furniture and electronics.

• Liability coverage—If you or a family member are at fault for another party’s losses, such as via bodily harm or property damage, your insurance may help offset financial consequences.

• Loss-of-use coverage—This part of your policy can compensate you for additional living expenses if your home is rendered temporarily uninhabitable by a covered peril.

What Is Rental Property Insurance?

If you rent out your home to tenants, rental property insurance, also known as landlord insurance, is an advisable investment. While exact details of coverage may vary, these policies can often include the following aspects:

• Structures coverage—This can insure the structural elements of your rental property, including its roof, walls, foundations and electrical and plumbing systems.

• Landlord liability coverage—This may render aid if tenants, guests or other parties are injured or suffer property damage for which you’re at fault, such as due to poor property maintenance.

• Lost income coverage—This may help you recoup losses you would’ve earned if your property is temporarily uninhabitable and you are unable to collect rent.

• Personal property coverage—This can financially protect items you may leave at the rental property, such as tools and lawn care equipment.

What Is the Difference Between These Types of Insurance?

As you can see, while home insurance and rental property insurance may include some shared financial protections, they also differ. While the former can insure a resident’s own personal property, the latter will not financially protect a tenant’s belongings. Furthermore, a renter needs their own liability coverage, as rental property insurance typically only covers the property owner and not acts committed by their tenants.

We’re Here to Help

Contact Amato Insurance Group today to learn more about the right coverage for you and your residential property.

This blog is intended for informational and educational use only. It is not exhaustive and should not be construed as legal advice. Please contact your insurance professional for further information.