Property insurance can get confusing fast. Two of the most common types, home insurance vs landlord insurance, are often mixed up, but each one plays a specific role. In this guide, we will break them down to help you understand which coverage is best for your situation and why it matters more than you might think!
What Is Homeowners Insurance?
Rental homeowners insurance is designed to protect the structure of your home and the personal belongings inside it. It also offers liability coverage in case someone is injured on your property. A standard policy typically covers damage caused by events like fire, storms, theft, and certain types of water damage.
House insurance when renting helps cover the cost to repair or rebuild your home and replace belongings if they’re damaged or destroyed by a covered loss.
You might be interested: What’s The Difference Between Lease and Rent?
Who Pays for Home Insurance When Renting?
The homeowner pays for insurance on the property, even when it’s being rented out.
Tenants are responsible for their own renters insurance. That policy covers their belongings, like furniture, electronics, and clothes, as well as their personal liability. So, while the structure is covered by the landlord, renters still need their own protection.
How Does Homeowners Insurance Work When Renting a Property?
Once you start renting out your home, a standard homeowners policy usually isn’t enough. Most rental homeowner insurance is meant for owner-occupied homes. So if you're no longer living there, your policy might not cover damage or liability related to tenants.
To stay protected, you’ll likely need to switch to landlord insurance. Please ensure you are aware of the KW notice period requirements as outlined in your lease or insurance agreement.
What Is Landlord Insurance?
Landlord insurance is made for people who rent out property (a single-family home, a condo, or a multi-unit building). It covers the physical structure, protects you from certain legal risks, and can even help replace lost rental income if the property becomes unlivable due to a covered event.
Unlike homeowners insurance, landlord insurance doesn’t protect your tenant’s belongings. It focuses on your investment and the risks that come with being a landlord.
Landlord Insurance for Investment Properties
When a home becomes a rental, it becomes a business, and a business needs the right protection. Landlord insurance gives property investors coverage for things like fire damage, storms, liability claims, and more. Some policies can even include vandalism protection or coverage for appliances provided to tenants.
Owning rental property is a smart investment. Landlord insurance helps make sure that investment is protected
How Much Does Landlord Insurance Cost?
Landlord insurance usually costs more than rental homeowners insurance, typically 15% to 25% more. That’s because renting out a property comes with extra risks, like tenant damage or longer repair times after a covered loss.
Your premium depends on things like location, building size and age, the type of rental (short-term or long-term), and what coverage options you choose. While the cost is higher, the peace of mind is worth it!
Key Differences Between Home Insurance vs. Landlord Insurance
Before choosing the right policy, it helps to see how homeowner rental insurance vs landlord insurance compare side by side.
Coverage: Property Damage vs. Tenant Belongings
House insurance when renting protects your house and everything in it, like furniture, electronics, and clothing. Landlord insurance focuses on the structure itself and any items you provide, such as appliances. It does not cover a tenant’s belongings; that’s the tenant’s responsibility through renters insurance.
Liability Protection: Homeowner vs. Tenant Accidents
Both policies offer liability protection, but the situations they cover are different. Homeowner rental insurance protects you if a guest is injured on your property. Landlord insurance steps in when a tenant or one of their visitors gets hurt.
How Rental Income Protection Differs
Homeowners policies typically don’t include any kind of rental income protection. But many landlord policies do. If your rental becomes uninhabitable due to a covered event (like a fire), landlord insurance can help replace the rental income you lose while repairs are being made.
When Should Landlords Consider Getting Landlord Insurance?
The moment a property stops being your primary residence and starts generating rental income, it’s time to look into landlord insurance.
- Renting out a second home or vacation property
- Turning your former residence into a rental
- Owning a multi-unit building
- Listing your home as a short-term rental (like Airbnb or Vrbo)
Even if the rental arrangement is casual or short-term, relying on homeowners insurance could leave you underinsured or, worse, with denied claims. Landlord insurance is specifically built for these situations, offering coverage tailored to rental risks.
Can You Combine Homeowners and Landlord Insurance?
Homeowners and landlord insurance serve different purposes, so they aren’t typically combined into a single policy. However, you can hold both types of policies at the same time if you own multiple properties.
For example, you might have homeowners insurance for investment properties and landlord insurance for a rental property you own. Some insurers also offer bundling discounts when you have multiple policies with them. Therefore, it’s worth asking your provider about savings opportunities.
Wrap up
Home insurance vs landlord insurance can feel complicated, but the goal is simple: protect your property and your finances. When in doubt, go to LeaseRunner and we will guide you through your best coverage options!
FAQs
Q1: Do I need landlord insurance for a short-term rental like Airbnb?
Yes, standard homeowners insurance typically doesn’t cover short-term rentals. If you’re renting out your home or part of it through platforms like Airbnb or Vrbo, you’ll likely need specialized coverage. Some insurance companies offer endorsements or separate policies for short-term rentals.
Q2: Can I require tenants to carry renters insurance?
Yes, and many landlords do. Requiring renters insurance helps ensure your tenants’ personal belongings are protected and may reduce your liability. It also encourages tenants to be more cautious, since they have a financial stake in protecting their own stuff.
