Who needs landlord property insurance?
If you are insuring a home that you do not live in, you need a landlord property insurance policy. If you have a tenant occupied dwelling and it is covered by a normal homeowners insurance policy, you are asking for trouble. Homeowners policies are only intended for owner occupied dwellings. Having a homeowners policy on a tenant occupied dwelling provide you no coverage for you money as the insurance company will not have to honor the insurance contract.
How does a landlord policy differ from a homeowners policy?
Landlord policies offer similar coverage as a homeowners policy with a few added benefits. First, landlord policies provide a coverage known as Fair Rental Income. This coverage will reimburse landlords for lost rental income caused by a covered peril or loss.
For example, if a tree falls on the roof of your rental property and causes extensive damage that takes two months to repair, your insurance company would reimburse you for the two months lost rental income due to the damage caused by the tree.
They will not however, reimburse you if a tenant simply moves out or the building becomes unoccupied.
What is not covered by a landlord insurance policy?
In most cases your tenants property and liability are not protected by a landlord policy.
For this reason we recommend all landlord have an explicit clause in their lease agreement requiring tenants to hold their own renters policy. Renters policies are extremely cheap, often costing only $100 a year, and provide liability and personal property protection for people who rent their home or apartment.