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What Type of Insurance Do I Need If I’m Renting Out My Home?

There are many reasons why you might want to rent out your home on either a short- or long-term basis. Whether you own a second home that you plan to lease to a tenant, or want to rent out a room in your house periodically through an online service such as the increasingly popular Airbnb, your first step should be to call us at Fox Insurance Agency in Beaverton, Oregon - 503-277-2300. Depending on the rental scenario, your standard homeowners policy may not cover losses incurred while your home is rented out, and you may require a more specialized insurance policy.

Short-Term Rentals/Primary Residence

 
If you are planning to rent out all or part of your primary residence for a short period of time, for instance, a week or several weekends, there will likely be two insurance scenarios.
  1. Some insurance companies may allow a homeowners policyholder (assuming they have notified the company) a short-term rental. Other companies will require an endorsement to the existing homeowners or renters insurance policy in order to provide insurance coverage.
  2. If you plan to rent out your primary residence for short periods, but on a regular basis, to various ‘guests’, this would constitute a business. Standard homeowners insurance policies do not provide any coverage for business activities conducted in the home. To be properly covered you would need to purchase a business policy—specifically either a hotel or a bed and breakfast policy.

Long-Term Rentals/Second Home

If you are planning to rent out your home for a longer period of time, such as six months or a year, to one person, couple or a family, you will likely need a landlord or rental dwelling policy. Landlord policies generally cost about 25 percent more than a standard homeowners policy because landlords need more protection than a typical homeowner. If you are renting out a vacation home or investment property, this would also require a landlord or rental dwelling policy.  

 
Landlord policies provide property insurance coverage for any physical damage to the structure of the home caused by fire, lightning, wind, hail, ice, snow or other covered perils. It also offers coverage for any personal property you may leave on-site for maintenance or tenant use, like appliances, lawnmowers and snow blowers.
 
The policy also includes liability coverage; if a tenant or one of their guests gets hurt on the property, it would cover legal fees, due to injury claims, and medical expenses.
 
Most landlord policies provide coverage for loss of rental income in the event you are not able to rent out the property while it is being repaired or rebuilt due to damage from a covered loss. This coverage is generally provided for a specific period of time.
 

Renters Insurance

As the landlord, your coverage is only on the structure itself and your financial interest in it. Your tenant’s personal possessions are not covered under your policy. In order to avoid disputes in the event of damage to the renter’s belongings, many landlords require a tenant to buy renters insurance before signing a lease.

Contact Us!

At Fox Insurance Agency, we can work with you to make sure you’ve got the coverage you need, while at the same time using all possible credits and discounts to make that coverage affordable. Just give us a call at 503-277-2300, visit our insurance website 24/7, or send us a note at info [at] foxinsure [dot] com. We want to help you meet your goals, and make sure what’s important to you is protected!

 

 

Information by the Insurance Information Institute.