Landlord handing a young couple keys to a house

Homeowners Insurance vs. Landlord Insurance for a Rental Property: Which Do You Need?

No matter what you use your rental property for, you need the right coverage to keep you and your property protected from the unexpected. Depending on your situation, you may need to get either a homeowners or landlord insurance policy.

An Overview of Homeowners Insurance and Landlord Insurance

Homeowners and landlord insurance policies can vary from insurer to insurer, but both plans will most likely include these coverage options:

  • Dwelling coverage — Covers the home’s structure in the event of a fire, storm, or another covered peril.
  • Other structures coverage — Covers structures on your property that are detached from your home, such as sheds and detached garages.

Homeowners insurance might be a better option if the property is your primary residence and you only plan to rent it out occasionally. A local agent can help you figure out what scenarios may or may not be covered by homeowners insurance while you're temporarily renting out your property.

Landlord insurance, on the other hand, is essential if you plan on renting out your single-family home, duplex, or investment property on an ongoing basis. It offers specialized protection to ensure your rental property is safeguarded from various covered losses.

Talk with a local agent today to see which insurance plan is best for your situation.

Key Differences Between Homeowners Insurance and Landlord Insurance

Homeowners and landlord insurance are similar in certain ways, but they also have their differences. Here are some of the key differences between these two types of insurance plans.

Personal Property Coverage

  • Homeowners insurance — Homeowners insurance typically covers personal belongings such as furniture, clothes, and electronics by up to 50% of your home’s insured value.
  • Landlord insurance — Landlord insurance may cover household items used to service your rental property like refrigerators, washers, dryers, etc. It typically doesn’t cover personal items you may have left behind at your rental property. For example, if you own a beach house and left your surfboard there, landlord insurance might not cover your surfboard if it gets damaged or stolen.

Liability Coverage

  • Homeowners insurance — Homeowners insurance helps protect you financially if you’re found liable for bodily injuries or property damage, regardless of where the covered incident happened.
  • Landlord insurance — Landlord insurance only covers accidents on the rented premises. For example, if a tenant suffers an injury due to faulty stairs, landlord insurance may help pay for subsequent medical or legal expenses.

Additional Living Expenses and Fair Rent Value

  • Homeowners insurance — Homeowners insurance offers additional living expenses. If your home gets damaged in a covered loss and is deemed uninhabitable, this coverage may help provide reimbursement for hotel stays, meals, other costs incurred while your home is being repaired.
  • Landlord insurance — Landlord insurance provides fair rent value. This coverage helps reimburse you for lost rental income while your rental property is being repaired due to a covered loss.

Protecting Tenants with Renters Insurance

Neither homeowners nor landlord insurance includes coverage for your tenants' belongings. If you decide to rent out your property to another person, we highly recommend including renters insurance as a condition in the leasing agreement.

Renters insurance may help cover your tenants’ belongings in the event of a fire, theft, or other covered loss. This type of insurance can also provide them with personal liability protection, which helps pay costs associated with bodily injury or property damage. For example, if your tenant's guest slips and suffers a back injury on the property, their renters insurance can help cover any resulting medical or legal expenses.

Renting your property to another person is a great way to create some additional income. However, it comes with many responsibilities, including finding the right insurance policy for your needs. Consider partnering with Mercury, where we provide reliable protection at an affordable rate.

Contact us today and get a fast, free quote for homeowners or landlord insurance!