Insurance is one of the best ways to protect your real estate investments, both as a property owner and as a landlord. Both landlord insurance and homeowner’s insurance provide property protection, but the coverages can vary widely. In this post, we’ll explore the differences between these two types of real estate insurance.
Homeowner’s Insurance: For Personal Residences
If you need insurance for the home that you live in, homeowner’s insurance is the right choice. Homeowner’s insurance is designed for properties used as primary residences by the actual person or entity that owns the property. Homeowner’s insurance typically covers damage to the structure of the home due to specific covered events, damage to personal belongings inside the home due to such events, and liability for certain accidents that occur on the property. In addition to paying to repair the property damage, homeowner’s insurance will also often pay for the policy holders to stay elsewhere while repairs are being made.
Covered events usually include fires, storms, and theft. Floods are not typically covered under a general homeowner’s policy and require a separate flood policy.
Landlord Insurance: Tailored for Rental Properties
If you need insurance on property that you rent out to others, landlord insurance is the way to go. Landlord insurance is very similar to homeowner’s with one key difference – landlord insurance does not cover damage to the tenant’s personal belongings. Landlord insurance also has broader liability coverage than a general homeowner’s policy, covering more events at higher limits, and offers loss of income coverage to protect the landlord’s revenue stream in case of interruption due to a covered event.
You should always recommend, if not require, that tenants carry renter’s insurance to cover damage to their personal belongings.
Additional Coverage Considerations
You may want to add additional coverages to your homeowner’s or a landlord’s insurance policy, depending on your specific situation. For example, if the property is located in a flood zone, a flood insurance policy should be considered. For areas prone to natural disasters, such as hurricanes in Florida, additional storm coverage may be desired. Consult with your insurance agent to determine the appropriate insurance coverages for your needs and situation.
At Douglas, We’ve Got You Covered
Choosing the right type of insurance is essential for protecting your investment and ensuring the stability of your rental income. If you own rental property that you rent or lease to others, landlord insurance is what you need for those properties. At Douglas Realty Property Management in southwest Florida, we help all of our property owners understand their insurance needs and make informed decisions about protecting their assets. To work with our expert team and turn your rental properties into truly passive income, contact us at 239-542-6906 or send us a message online.