Buying Homeowners' Insurance for your Rental Property

Many home owners that decide to buy a new house are now holding onto their old home to use as a rental property until the market turns a new corner. Of course, this brings up a completely new and probably foreign idea regarding what type of homeowners' insurance you might need in order to cover a rental property that was once your home. Since you are not necessarily getting into the business of rental properties and are only renting out one property, you might find yourself a bit confused regarding what type of policy to purchase. Of course, your friendly local insurance agent can help you, yet at the same time, you are likely to pay more for the homeowners' insurance by going through a local agent.

Homeowners' insurance policies for rental properties are actually rather simple since you are technically covering less in value (as their renters' insurance is required to cover their belongings, electronics, and their liability) but is still different from other policies that are used either for the home that you live in or the insurance required for the homes you would carry in the event of renting out numerous properties. So first, sit back, relax, and start the process slowly and methodically and you will find that this step is probably one of the simplest steps to your entire move.

The laws in almost all 50 states are basically identical when it comes to renters' insurance and buying home insurance for one rental property. What gets tricky is the basic understanding of how much coverage of exactly what you may need it for. Confused already? Let me give you an example.

Renters are generally not considered to be as cautious or as respectful to your own property and so you may need to bump up the coverage in categories such as damage to the home and the potential for fire or other disasters since the likelihood of these things then increase with renters. However, your basic coverage that applies to belongings in the home will go down. But what about liability? Good question. If one of your renters decides to let their aggressive dog run loose and someone is attacked because of this fact, in most states you are held liable. Landlords, even landlords of just one property, are often held liable for the behaviors and damages caused by their tenants. While this may seem unfair, it is designed to prevent slum lording whenever possible.

Your home's value, your home's general condition, and a few other individual factors apply to figuring out what type of homeowners' insurance you will need and how costly it is likely to be. One good representative from any home insurance company will be able to answer all of your specific questions and all that you are requiring of their service.