If you’re renting your home to others rather than living in it yourself, your homeowners policy will no longer offer you all the coverage you’ll need. Although you’ll still need to protect your home and other physical property, you’ll also need liability coverage and protection against the loss of rental income.
Most commercial insurers offer policies specifically designed for rental properties, but variations abound, so you may want to shop around for the best coverage. Here’s what to look for:
- Coverage for the physical structure against a wide variety of possible perils (e.g., fire, flood, storm)
- Coverage for any outbuilding, such as a garage or a shed
- Replacement cost coverage (preferable to coverage based on an actual cash value)
- Coverage for your own property (e.g., appliances, lawnmowers, snowblowers) left on the premises
- Liability protection for injuries to others, or damage to their property, that occur on your property
- Coverage for the medical expenses of others injured on your property
- Reimbursement for lost rental income if the loss is the result of a covered occurrence, such as a fire
Finally, be aware that you’re generally not liable if something happens to your tenants’ personal property (e.g., furniture, jewelry, antiques). Your tenants will need their own renters insurance to protect their property in the event of a fire, theft, or other loss.
If you have questions or need assistance, contact the Experts at Henssler Financial: 770-429-9166 or experts@henssler.com.
Disclosures:
The following information is reprinted with permission from Forefield, a division of Broadridge Financial Solutions, Inc. All material presented is compiled from sources believed to be reliable and current, but accuracy cannot be guaranteed. The contents are intended for general information purposes only. Information provided should not be the sole basis in making any decisions and is not intended to replace the advice of a qualified professional, such as a tax consultant, insurance adviser or attorney. Although this material is designed to provide accurate and authoritative information with respect to the subject matter, it may not apply in all situations. Readers are urged to consult with their adviser concerning specific situations and questions. This is not to be construed as an offer to buy or sell any financial instruments. It is not our intention to state, indicate or imply in any manner that current or past results are indicative of future profitability or expectations. As with all investments, there are associated inherent risks. Please obtain and review all financial material carefully before investing.
