Renting out your greatest investment can be nerve-wracking and confusing. As a homeowner, you’ll need to know what kind of insurance you’ll need so that you can protect your home. Landlord and Homeowners’ insurance differ greatly in coverage and cost. Researching your policy and insurance should be the first step into earning passive income with renting. Because insurance policies differ greatly from one another, it is best to contact your specific insurance company.
Insurance companies require you to live in your home for most of the year. This means that you could rent your home for a special occasion like a sporting event or festival and keep your homeowners’ insurance policy. Homeowners’ insurance will protect your property against
- Damage against certain risks laid out in your policy
Homeowners’ insurance will generally cost you less than landlord insurance. However, homeowners’ insurance requires you to be living at the property for most of the year. If you rent out your property for only a week or two, your homeowners’ should cover some damage that renters might leave.
Landlord insurance is similar to homeowners’ insurance in some ways and concentrates on protecting your property. Unlike homeowners’ insurance, a good landlord policy will protect you against:
- Non-payment of rent
- Accident coverage
- Loss of income
- Property damage caused by tenants
Landlord insurance will not cover the renter’s belongings so you may want to add an additional renter’s insurance policy for your protection. Landlord insurance is there to protect your home from damages from renters and financial protection from income loss.
Insurance decisions can be difficult and it is always better to have a qualified agent on your side. Because insurance policies differ in coverage, homeowners’ should go over their policies with an experienced company and agent. At American insurance brokers, we provide experience and knowledge so that you can make the best decision for your investment. For a free quote click here.